Mega Deal: Media General to Acquire LIN For $1.6B

Station groups Media General and LIN are poised to merge in a $1.6 billion cash and stock deal that will create the nation’s second-largest pure-play broadcast group, according to Variety.

The combination will bring together 74 stations, most of the network affiliates, in 46 markets, reaching 23% of U.S. TV households. The deal unveiled Friday calls for Media General to acquire LIN with $763 million in cash and the remainder in stock. With LIN’s roughly $1 billion in debt included, the deal has an enterprise value of $2.6 billion.

The Media General-LIN union continues the breakneck pace of consolidation in the TV station sector during the past two years. The combo will make Media General the second-largest owner of TV stations behind Sinclair Broadcast Group, which has 167 outlets.

Broadcasters maintain they need more size and scope to give their local outlets clout in dealing with national advertisers and MVPD giants — an arena that promises to see more consolidation a la the pending union of Comcast and Time Warner Cable.

The agreement calls for LIN prexy-CEO Vincent Sadusky to become CEO of the enlarged Media General, based in Richmond, Va. Media General’s J. Stewart Bryan III will continue as chairman of the board.

J. Stewart Bryan

“Combining Media General and LIN Media will create the second largest pure-play TV broadcasting company in the United States, a financially strong organization that will have opportunities for profitable growth greater than either company could achieve on its own,” Bryan said.

“Our two companies share a deep commitment to operating top-rated stations, to providing our local markets with excellent journalism and to engaging in meaningful ways with the communities we serve. The prospects for digital media growth are particularly exciting.”

Media General’s largest market is San Francisco, where it owns the indie KRON-TV, one of the few stations in the group not affiliated with a network. Most of its stations are in small- and mid-sized markets such as Tampa, Fla., Columbus, Ohio and Raleigh-Durham, N.C. LIN’s largest outposts are in Portland, Ore. and Indianapolis.

Media General projects $70 million in operational savings within three years of the deal closing.

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