Television station owner Gray Television Inc. is buying fellow station owner Raycom Media Inc. in a $3.65 billion deal that they say will create a company with the third-most number of stations in the nation. Among Raycom’s holdings is Baton Rouge station WAFB-TV.
As The Wall Street Journal reports, the move comes amid consolidation in the TV industry as station owners look to increase their leverage with both broadcast networks, who supply much of their programming, and pay TV distributors, who carry their channels.
The industry is also grappling with increasing numbers of cord cutters, namely viewers who are ending cable TV subscriptions and instead are watching online videos and using streaming services.
Gray is buying Raycom for $3.65 billion in total proceeds, including $2.85 billion in cash, $650 million in preferred stock and 11.5 million shares of Gray stock, valued at $147.2 million Friday. In pre-market trading, shares of Gray rose 22%. Raycom is employee-owned.
The combined company will own 142 television stations in 92 U.S. markets, including WAFB-TV in Baton Rouge and WVUE-TV in New Orleans.
In a move to ease regulatory approval, Gray will sell television stations in all nine of the markets where both companies operate stations.
Raycom Chief Executive Pat LaPlatney is set to become Gray’s president and co-chief executive. Gray Chief Executive and Chairman Hilton Howell will become executive chairman and co-chief executive of the combined company.
Raycom has also started a process to sell or spin off its community newspapers division, Community Newspaper Holdings Inc., which owns over 100 titles in 23 states, as well as PureCars, a digital ad platform for the automotive industry. Read the full story.
