Broadcaster Gray TV said it has reached a deal to acquire the TV and radio assets of Schurz Communications in a deal valued at about $442.5 million. The transaction comes on the heels of Media General’s $2.4 billion agreement to acquire Meredith Corp.
The deal is the latest in what could be a new push for consolidation in the broadcast market. Gray TV has about 76 stations in 45 markets in the South, Southwest, Midwest and West. With the addition of Schurz, Gray will grow to about 86 stations in 49 markets in 28 states, adding properties in Wichita, Kans., (KWCH-TV, CBS); Roanoke-Lynchburg, Va., (WDBJ-TV, CBS); Springfield, Mo., (KYTV, NBC); South Bend Ind. (WSBT, CBS); Rapid City, S.D., (KOTA, ABC); and Anchorage, Ak., (KTUU, NBC). WDBJ in Roanoke-Lynchburg, Va., is where two journalists – Alison Parker and Adam Ward – were murdered on air by a former employee in August.
The sale comes as some analysts believe that a new consolidation wave could sweep the broadcast business, as stations look to increase their leverage with content providers.
In a statement Gray said it would divest two stations – KAKE-TV in Wichita, WNDU in South Bend – to comply with Federal Communications Commission regulations. In addition, Gray said it would combine its existing operations in Georgia and South Dakota with Schurz’ stations in those markets. It plans to offer Schurz’s Augusta, Ga., station WAGTV in the upcoming FCC spectrum auction.
"Today is a momentous day in Gray's 118-year history," said Gray CEO Hilton H. Howell, Jr., in a statement. "Through the Schurz transaction, we will significantly expand the quality of our portfolio of leading television stations. We welcome more dedicated reporters, account executives, and technologists to our growing family. Quite simply, Gray's existing stations will make the Schurz stations stronger, while the Schurz stations will make our existing stations better."
Schurz, based in Mishawaka, Ind., owns TV and radio stations, newspapers and four cable systems in Arizona, Florida and Maryland with about 90,000 subscribers. Gray said Schurz’s non-broadcast assets would not be included in the sale. The company was created in 1872 when Alfred B. Miller and Elmer Crockett founded the South Bend Tribune, and their descendants still own the firm today.
"In a rapidly consolidating industry where size and scale matter more than ever before, we have come to the realization that Gray Television would be the best steward to ensure our stations succeed over the long-term," explained Todd Schurz, President and CEO of Schurz. "Gray knows how to operate top stations in small and medium-sized markets, and they have an entrepreneurial and decentralized culture," he continued. "Moreover, Gray shares our commitment to local communities, staffs, journalistic ideals, and the broadcasting industry. Being part of a larger company with these important credentials will create more opportunities for employees and the communities that we all love."