Gray Television Acquires Raycom Media, ACC Network Through 2019


Gray Television, Inc. (GTN) has agreed to acquire Raycom Media for $3.65 billion, including $2.85 billion in cash. The combined entity will own 142 stations in 92 markets (predominantly in the South and Midwest), enabling it to reach 24% of all U.S. households, and making it the 3rd largest station owner in the country; only Sinclair + Tribune (62%, 102 markets) and Nexstar Media Group (39%, 100 markets) own more stations and neither has more top-ranked (all-day Nielsen ratings) stations (62). Gray intends on selling stations in the 9 local markets (think: Knoxville, Toledo, Waco) where Raycom Media also operates to ensure regulatory approval. Raycom President and CEO Pat LaPlatney will become Gray’s President and Co-CEO, GTN shareholders will assume 89% ownership of the combined entity.

Howie Long-Short: This deal slipped under the radar as the pending Sinclair/Tribune deal and ongoing Fox/Comcast/Disney dance have received most of the attention of late. In the short-term, the combined Gray + Raycom entity should see revenues grow by $15 million (Raycom contracts converting to Gray’s rates) and experience $40 million in cost savings resulting from duplicate station/corporate expenses. Longer-term, strength in numbers (households) will provide the station group with leverage in its negotiations with broadcast operators and cable distributors (note: local news channels are still valued). Gray Television Inc. (GTN) shares are up +23% since the merger was reported, closing on Friday at $15.80. Raycom Media is not publicly traded; the company is employee-owned.

Fan Marino: You may not be familiar with Raycom Media, but subsidiary Raycom Sports currently controls production and distribution for ACC telecasts as ACC Network. That changes in August 2019 though, as ESPN and the ACC have signed a 20-year pact that will give the WWL media (TV and digital) rights to broadcast the league’s football and basketball games on a new linear network (ACC Network currently operates as a digital channel). That’s good news for the conference’s member schools as the ACC distributed the least amount of money ($26.6 million) to its members, among P5 conferences, in 2017; the new network is expected to boost payouts by at least $10 million/annually. It’s worth noting that Raycom does maintain syndicated TV rights to ACC athletic contests through 2027.

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