With Monday’s early morning blockbuster announcement that Quincy Media, Inc., largely controlled by two families whose ownership stake in the Illinois-based company dates to 1926, will be purchased by Gray Television, the question of whether the deal meets FCC and Justice Department approval is perhaps of one the biggest topics surrounding the transaction to swiftly emerge in D.C. circles.
The quick answer: Yes. But, that depends on the spin-off of stations in six markets. One of those markets is Tucson — where Quincy in 2019 completed its October 2018 deal to purchase NBC affiliate KVOA-4 from Cordillera Communications.
What does the future hold for KVOA? That’s up to its future owner.
RBR+TVBR has confirmed that Gray will immediate divest Quincy stations, not its own properties, in the six markets where current local ownership rule limits prevent Gray from keeping ownership of the properties.
Thus, KVOA is set to be spun — again.
It marks a new period of uncertainty for KVOA, although potential buyers including Allen Media Group, controlled by Byron Allen, and the Apollo Global Management-controlled Cox Media Group are already being discussed as potential buyer.
KVOA had been owned by Cordillera since 1993, when it was obtained from the Hobby family’s H&C Communications, which was formed in an internal reorganization of family assets; KVOA had been obtained by Hobby in 1982, when it still published the now-defunct Houston Post.
Historically, KVOA’s ownership is enmeshed in the FCC’s cross-ownership rules, now the subject of a Supreme Court case awaiting a decision likely to arrive in June 2021. With a tightening of the rules already in play, KVOA’s ownership in the early 1970s involved a controlling stake held by Pulitzer Publishing. As the owner of the Arizona Daily Star, starting in 1971, Pulitzer’s cross-ownership came under the microscope. To avoid any issues, KVOA’s Pultizer ownership stake was spun to an employee-owned group. The remaining stake in KVOA, held by Steinman Stations, was soon sold to the employee-led group in 1972.
Now, KVOA is poised to see its third owner in three years.
It won’t be The E.W. Scripps Co., which acquired every former Cordillera station but KVOA in 2019. Scripps couldn’t purchase KVOA as it already owns KGUN-9 and the CW affiliate in Tucson, KWBA-58.
Gray’s asset in Tucson, Arizona’s second-largest DMA and home to the University of Arizona’s main campus, is CBS affiliate KOLD-13. However, it operates two TEGNA stations under a shared services agreement Gray would rather maintain than give up. The SSA allows Gray to handle the sales and programming operations of FOX affiliate KMSB-11 and MyNetwork TV affiliate KTTU-18 in Tucson.
The history of the SSA is tied to prior ownership groups. In November 2011, then-KMSB and KTTU owner Belo Corporation, which was suffering from financial challenges largely tied to its newspaper operation, signed a shared services agreement with Raycom Media for its Tucson TV pair. The SSA transferred to Gray following its merger with Raycom.
QUINCY’S SPINS BEYOND ARIZONA
In addition to KVOA-4, Gray has “elected” to divest “high quality television stations” licensed to Quincy in five other markets where Gray owns a full-power broadcast TV station.
As such, the following stations are poised to go to a third party:
- ABC affiliate WKOW-27 in Madison, Wisc.
- ABC affiliate WSIL-3 in Harrisburg, Ill., which today serves the Marion-Carbondale, Ill., DMA but is described by Gray as a station serving nearby Paducah, Ky. It also serves Cape Girardeau, Mo.
- NBC affiliate KWWL-7 in Waterloo, Iowa, which offers The CW+ and MeTV Network on its DT2 and DT3 signals
- WXOW-19 in LaCrosse, Wisc., and semi-satellite sibling WQOW-18 in Eau Claire, Wisc. They are ABC affiliates.
- WAOW-9, also an ABC affiliate, in the Wausau-Stevens Point, Wisc., market.
Want to purchase any or all of these properties?
Wells Fargo Securities has just launched a formal process to market these divestiture stations to qualified third parties.
The divestitures may take the form of cash sales, swaps involving other television stations, or a combination of cash and swaps.
Just don’t call Kevin Latek, or the Gray executive team. And calling QMI head Ralph M. Oakley is not advised. “Interested parties should contact Wells Fargo Securities directly and should not contact Gray or Quincy about the divestiture opportunities,” the companies noted early Monday.
Oakley, who serves as QMI’s President/CEO, said, “While this is the end of a long and successful chapter, it also represents a wonderful new chapter for the communities we serve and our employees with the acquisition of the stations by Gray. They
are great operators and people and our philosophies very much mirror one another.”
