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TV affiliates part of national media mergers

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Mergers are in motion for area television stations, and one local media expert believes operational changes are likely to take root as a result.

Irving, Texas-based Nexstar Broadcasting Group Inc. (Nasdaq: NXST), which owns KOZL-TV and manages CBS affiliate KOLR 10 in Springfield, penned a merger agreement with Richmond, Va.-based Media General Inc. on Jan. 27. Nexstar, which has committed $4.7 billion in financing for the transaction expected to close in September or October, will acquire all outstanding shares of Media General for $10.55 per share in cash and 0.125 of a share of Nexstar Class A common stock for each Media General share.  

The result of the deal, according to a joint release from the companies, will be a name change to Nexstar Media Group Inc. for the emerging firm comprising 171 television stations in 100 markets, reaching 39 percent of U.S. viewers.

This month, Atlanta-based Gray Television Inc. (NYSE: GTN) is expected to close on the purchase of Mishawaka, Ind.-based Schurz Communications Inc., the parent company of KY3 Inc.

In the $442.5 million buyout, Gray would own NBC affiliate KY3 – the top-rated station in the market – and KCZ, the CW affiliate in Springfield. Gray also would assume Schurz’s responsibility to provide sales and services to Perkin Media’s KSPR, the local ABC affiliate. According to Springfield Business Journal reporting, once the acquisition of Schurz Communications closes, Gray Television would grow to serve 49 markets from 30 in mid-2013.

“The culture is probably what will change the most and the fastest,” said Leonard Horton III, an instructor of broadcast journalism at Missouri State University and a former news reporter in Tallahassee, Fla.

He said broadcast company mergers are common and they often come with changes.

“Ownership is very important in terms of the philosophy of how they will pay people and how many people would be on staff, what types of facilities, whether there are robotic cameras versus non-robotic cameras, what kind of news director,” he said.

Horton worked for a Gray TV station in Tallahassee 2007-09.

“We had a whole lot of reporters, but they were getting paid like $18,000 or $19,000 a year,” he said. “Right across the street, our competitor, ABC-27, which was owned by a small, family company called Calkins Media, they had fewer reporters, but they were making more money – probably $6,000-$7,000 more. But they often had to travel farther for their stories.

“Ownership plays a big role.”

Nexstar Broadcasting representatives dismissed the idea the Media General deal would prompt changes at KOZL or KOLR.

“The acquisition of Media General should not affect Springfield operations,” said Leo Henning, Nexstar’s vice president and general manager in Springfield, via email.

Across town at KY3 Inc., General Manager Brian McDonough is preparing for an ownership change that represents Gray Televisions’ entrance into Missouri. He said it was too soon to know the impact.

“We are expecting the close to happen in the very near future, and we very much look forward to becoming a part of the Gray Television family,” McDonough said by email.

Calls for comment to Gray Television Executive Vice President and Chief Legal and Development Officer Kevin Latek were not returned by press time. According to a Gray news release Jan. 27, Latek was one of five officials promoted in response to the company’s growth. Latek previously served as senior vice president of business affairs.

Paul Windisch, general manager of local Fox affiliate KRBK-TV, declined to comment, saying he didn’t know enough about the moves.

Pointing to the ownership change at KY3 Inc., he said by email: “I have heard several possibilities of what might happen, but I believe those are just rumors, and I would prefer not to make any statements about this.”

But Horton sees a bottom-line influence to these increasingly attractive deals: additional revenue platforms on TV, Web, mobile and social media.

“It allows companies to charge more for advertising because their reach is larger now,” he said. “If I want to solicit a business to advertise on my local station, I can say, ‘Because we advertise to these people and you’re going to be seen here and online and on mobile,’ they can charge a lot more and justify it with numbers.”

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