Following the FCC’s spectrum auction, it became clear that smaller broadcast TV operators, or those with a small footprint in TV, would become sellers rather than acquisition players.
Among the companies that looked poised to exit the TV business was Saga Communications, which has just two stations, in the small markets of Joplin, Mo., and Victoria, Tex., where chunks of spectrum were valued far below what spectrum went for in the biggest of DMAs.
Now, speculation has turned to confirmation: Saga is leaving the TV business.
At the same time, it is reinvesting in its core radio business as it looks to become the strongest pure-play on Wall Street.
For $66.6 million, Saga is selling CBS affiliate KOAM-7 in the Joplin market, which includes city of license Pittsburg, Kan., and most of its Victoria Television Group, to Morgan Murphy Media.
The Victoria Television Group is comprised of stations representing just about every major broadcast TV network operating in the U.S. The stations being sold directly from Saga to Morgan Murphy are ABC KAVU-25, NBC KMOL-17, CBS KXTS-41, FOX KVCT-19, Univision KUNU-21, and Telemundo KVTX-45.
Concurrently, FOX affiliates KFJX-14 in Joplin-Pittsburg, and KVCT-19 in Victoria, are being transferred from Surtsey Media — a wholly owned subsidiary of Surtsey Productions, which is housed alongside Saga at its Grosse Pointe Farms, Mich., headquarters — to SagamoreHill Midwest. This entity will enter into operating agreements with subsidiaries of Morgan Murphy.
FAMILY DEAL THWARTS BIG BOYS
The transaction keeps the TV stations away from the bigger companies looking to build scale, such as Nexstar Media Group. In fact, the deal gives a boost to a family-owned radio and TV operator that owns WISC-3 in Madison and WKBT-8 in La Crosse, Wisc.; and KXLY-4 in Spokane; and simulcast partners KAPP-14 in Yakima and KVEW-44 in Kennewick (Tri-Cities), Wash.
On the radio side, Morgan Murphy owns AM/FM combos in Lancaster and Platteville, Wisc., respectively; and FM in Sageville, Iowa; an AM/FM combo in Coeur d’Alene, Idaho; and a two AM/three FM cluster in Spokane.
The Madison, Wisc., based company also runs monthly lifestyle publication Madison Magazine, and a digital marketing agency, Phase 3 Digital, in four U.S. markets.
“We are thrilled to grow our family of stations in these two markets,” said Elizabeth Murphy Burns, the company’s President/CEO. “These stations are the perfect fit with our company because of their strong foundation of market leadership and community service.”
The company added that the acquisitions fit with Morgan Murphy’s growth strategy of expanding into markets “where it can hold and grow a leadership position across a multitude of platforms.”
Known as “MMM” in Madison, Morgan Murphy has a long heritage in the media industry, with three generations of family ownership dating back to 1890. “Founded in the newspaper business, the company has always been forward-looking and today aggressively serves audiences and advertisers through a variety of electronic and digital offerings,” the company notes.
Pending regulatory approval, the deal is expected to close in Q3 2017.
Commenting on his company’s exit from TV ownership, Saga President/CEO Ed Christian said, “We’ve had the great pleasure of owning KOAM in Joplin since 1994 and KAVU in Victoria since 1999. It has been a great experience for us to serve both communities with terrific television stations that focused heavily on the local markets.”
He alluded to the post-spectrum auction environment for TV station owners as a chief reason for the sale.
“We made a very difficult decision that, with all the changes taking place in the television industry, it was time for us to return to our roots in radio,” Christian said.
