In a move signaling major consolidation in the broadcast TV world, Nexstar Broadcasting has won a battle against Meredith Corp. to take over Media General.
Irving, Texas-based Nexstar has agreed to pay $4.6 billion in cash and stock for Media General, creating a broadcasting company that controls 171 stations serving 100 U.S. markets -- a formidable negotiating opponent for any pay-TV operator to face in a broadcast retransmission licensing negotiation.
"New Nexstar" will reach 39 percent of U.S. TV homes, the maximum allowed reach under FCC station ownership rules. As part of its breakup deal, Meredith also gets the right to negotiate for any station or other asset that Media General has to part with in order to get regulatory approval for the Nexstar purchase.
Meredith had agreed in September to pay $2.4 billion to acquire Media General. Meredith will now receive a $60 million breakup fee to walk away from that deal. Shareholders for Nexstar and Media General may also receive additional compensation based on what kind of sales the respective companies generate at the FCC's upcoming incentive auctions.
"The acquisition of Media General's broadcasting and digital media assets represents a transformational growth opportunity for Nexstar and is strategically and financially compelling," Nexstar CEO Perry Sook said. "The transaction increases Nexstar's broadcast portfolio by approximately two-thirds with very limited overlap with our existing properties, more than doubles our audience reach, provides entrée to 15 new top-50 DMAs and offers synergies related to the increased scale of the combined digital media operations."
- read this Nexstar press release
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