Paperwork has been filed with the FCC that will see the regulatory body decide whether or not Cox Media Group has its blessing for the sale of 18 television stations — including major “Big Four” network affiliates — to the parent of recently reinvented cable television network INSP.
While many of the biggest details first surfaced on March 30, we know how much Imagicomm Communications is paying for the properties.
It’s a blockbuster of a deal.
According to the Asset Purchase Agreement, Cox will earn $488 million from the divestment — plus the working capital amount, minus any deficit if applicable.
This makes Imagicomm’s offer for the Cox spinoffs among the largest divestments seen in recent memory — even bigger than a deal consummated between Gray Television and Allen Media Group.
With Quincy Media, Inc.’s sale to Gray Television, valued at $950 million, the Byron Allen-led entity stepped forward and purchased 10 stations at a price of $380 million. A separate deal, valued at $70 million, also gave AMG ownership of WJRT-12 in Flint, Mich.
While the combined $450 million Allen invested in the 11 stations represents a higher per-station value than the Imagicomm transaction, the total dollar amount is what is eye-popping to some.
David Schutz, of Hoffman Schutz Media Capital in Bainbridge Island, Wash., tells RBR+TVBR that it was 11 years ago when a deal of this financial magnitude was struck. And, that was a radio deal, not a television spin.
In the first weeks of 2011, Bonneville International Corp. agreed to divest its radio stations in Chicago, St. Louis, Cincinnati and Washington, D.C., to Hubbard Broadcasting. The transaction included the top-billing radio station in the nation, WTOP-FM and its network surrounding Washington. The price paid by Hubbard was $505 million; it closed on March 1, 2011.
“It takes us back as we’re sorting through the rubble of the financial crisis,” he says of the Bonneville-Hubbard transaction. “Tribune’s bankruptcy had spread out and been sorted through. You have Citadel.”
Fast-forward to 2022, when big TV deals are coming to fruition while radio isn’t getting the same dollar attention. Are their parallels that anxious sellers and brokers can look to? “We’re going through a tremendous shakeout, and I am starting to get cold calls again on transactions, and they’ve been few and far between since the start of COVID,” Schutz says.
Meanwhile, the Imagicomm/CMG asset purchase agreement includes a provision that says Imagicomm must honor the collective bargaining deal in force at the Binghamton, N.Y. stations with NABET-CWA and AFL-CIO.
Imagicomm is led by David Cerullo. He’s an American Pentecostal minister and televangelist, and that’s led Rep. Jared Huffman (R-Calif.) to verbally protest the transaction with Cox Media Group. Huffman, who also cites further industry consolidation as a reason for his pledge to block the sale — despite Imagicomm never having ever owned broadcast TV properties — is likely concerned that Cerullo’s group, plus Sinclair Broadcast Group, eliminates progressive political voices from local broadcast television (minus PBS) in his district. Huffman is based in Eureka, Calif.
The transaction involves the following properties:
- Alexandria, La. – KLAX-31 (ABC)
- Binghamton, N.Y. – WICZ-40 (FOX)
- Eureka-Arcata, Calif. – KIEM-3 (NBC) & KVIQ-17 (CBS)
- Greenwood, Miss. – WABG (ABC), WABG-HD2 (FOX), WNBD (NBC), and WXVT (CBS),
- Idaho Falls, Idaho – KPVI-6 (NBC)
- Medford, Ore. –KMVU-26 (FOX)/KFBI-48 (Telemundo)
- Memphis – WHBQ-13 (FOX)
- Spokane – KAYU-28 (FOX)
- Syracuse – WSYT-68 (FOX)
- Tulsa – KOKI-23 (FOX) and KMYT-41 (MyNetwork TV)
- Yakima, WA – KFFX-11 (FOX) and simulcast partner KCYU-LD 41 in Tri-Cities, Wash.
- Yuma, AZ – KYMA-11 (NBC)
All but the Tulsa pair and the Memphis property are former Northwest Broadcasting properties, sold by the Brian Brady-led organization to Apollo Global Management right before it obtained majority control of CMG.
WHBQ has been a part of the CMG family since October 2014, when it formally gained control of the property through a trade with Fox Television Stations that gave the entity led by Jack Abernethy ownership of KTVU-2 and KICU-TV (branded as KTVU+) in San Francisco. That deal also yielded CMG WFXT-TV in Boston, a key component of Cox’s TV holdings.
The Tulsa siblings, KOKI and KMYT, entered the Cox Media Group family in July 2012 as part of a $300 million transaction with Newport Television that also gave CMG two television stations in Jacksonville.
Imagicomm’s INSP is today known for Westerns and family-oriented programming. It’s been doing so since October 2010 and is a commercially supported network. Before that, INSP was a broadcast ministry, founded by the Rev. Jim Bakker and his wife, Tammy Faye Bakker, as PTL Television Network.
In 1990, after the resignation of Bakker following a well-publicized scandal, the PTL operation declared bankruptcy. From its ashes came INSP, led by CEO Cerullo’s father, Morris Cerullo.
Advisors
Truist Securities, Inc. served as financial advisor to INSP and Imagicomm Communications in connection with the Transaction and is acting as left lead arranger on the debt financing. Davis Wright Tremaine, LLP served as lead M&A counsel to INSP and Imagicomm Communications, and Bradley Arant Boult Cummings served as their financing counsel.
Moelis & Company, LLC and LionTree served as financial advisors to Cox Media Group, and it was represented on the transaction by Davis Polk & Wardwell LLP, with Cooley LLP and Morgan Lewis & Bockius LLP serving as special regulatory counsel.
