On Monday, RBR+TVBR reported the sale of 13 TV stations in 10 markets by ZGS Communications to NBC Telemundo License LLC, the NBCUniversal arm that includes the Telemundo Spanish-language network’s owned-and-operated stations. Telemundo is not purchasing ZGS, as originally reported by RBR+TVBR.
The transaction is two-pronged. The first transaction, filed today with the FCC, involves one full-power station, five Class A stations, and low power stations (LPTVs) serving the Springfield, Mass., and Richmond.
Four Class A stations are also involved in the deal, with Form 314 filings set for a later date with the Commission.
We also now know that channel-sharing agreements forged by ZGS, a participant in the FCC’s incentive auction, are also involved in its deal with Telemundo.
We’ve also confirmed the purchase price for the 13 stations.
According to five Form 314 filings made Tuesday (12/5) with the FCC, ZGS seeks the Commission’s consent in transferring the following stations to NBC Telemundo License LLC:
- KTDO-47, a full-power facility in Las Cruces, N. Mex, and KTDO-LP 48 in El Paso, Tex., from licensee El Paso Television
- WKME-CD 31 in Kissimmee, WMVJ-CD 29 in Melbourne, and WTMO-CD 31 in Orlando, from ZGS Broadcasting of Orlando
- WRMD-CD 49 in Tampa, from ZGS Television of Tampa
- WWDT-CD 43 in Naples, Fla., from ZGS of Fort Myers-Naples
- WDMR-LD 51 in Springfield, Mass., from ZGS Hartford
- WZTD-LD 45 in Richmond, from Onda Capital
As noted in RBR+TVBR‘s initial coverage, ZGS and Telemundo plan to file applications for the stations located in Washington, D.C.; Hartford; Providence; and Raleigh “in the coming weeks.”
The asset purchase agreement signed by ZGS and Telemundo clocks in at 103 pages. It includes all 13 stations to be transferred from ZGS to the NBCUniversal unit.
And, on Page 41, the purchase price is shown: Telemundo is paying $75 million to ZGS for the 13 stations … and the channel-sharing agreements that are associated with any station that is relinquishing spectrum following the FCC’s spectrum auction.
This explains the different phases of Form 314 filings by ZGS and Telemundo, a Telemundo spokesperson tells RBR+TVBR.
A $5.65 million escrow deposit has been placed into an account held at John Marshall Bank by Telemundo.
BEHIND THE CHANNEL-SHARING ACCORDS
In Washington, WRC-4 has long been NBC’s station in the National Capital region.
Now, with this transaction, WZDC-CD 25 will be operated under an LMA starting on January 1, 2018 until the parties close on the transaction and a channel-sharing agreement for that station with WRC goes into effect. The new Telemundo station team will be co-located with WRC.
ZGS’s Onda Capital pocketed $66,182,037 in Auction 1000 for relinquishing the spectrum of WZDC; it has a CSA with WRC.
Meanwhile, there is a similar situation in the Constitution State for ZGS and NBC.
WRDM-CD 50 will be co-located with Hartford WVIT-30 and will be operated under an LMA by WVIT-30 until that transaction is closed and a CSA goes into effect. WRDM attracted $10,574,516 in Auction 1000.
Meanwhile, a Telemundo spokesperson explains that Providence and Raleigh do not yet have channel sharing agreements in place. Construction Permit applications will be filed, followed by license assignment applications when channel-sharing arrangements have been finalized with respective third-party stations. It is a similar process to Hartford and Washington, D.C., for Telemundo and NBCUniversal.
WRIW-CD 50 in Providence attracted $33,807,537 in Auction 1000 and is going away. In Raleigh, WZGS-CD 44 took in $30,120,779 from giving up spectrum in the FCC incentive auction.
A Local Programming and Marketing Agreement (LMA) goes into effect on Jan. 1, 2018 for the ZGS stations in Hartford, Springfield, Providence, Richmond, and Washington, D.C., respectively.
ZGS will continue to own Class B WILC-AM 900 in Laurel, Md., in the Washington, D.C. DMA. Miami-based ZGS Digital is also not involved in this deal with Telemundo.
There is no broker associated with this transaction.
Erin Kim of Lerman Senter is the legal counsel involved in this deal.
