MOOSIC — The media conglomerate that owns the Morning Call newspaper in Allentown announced Monday that it has reached a deal to buy the parent company of WNEP-TV and 18 other stations nationwide for $2.73 billion in cash.
The Chicago-based Tribune Co. owns 23 television stations and WGN America, a cable network, in addition to a bevy of newspapers including the Chicago Tribune, Los Angeles Times and Baltimore Sun. With the purchase of Local TV Holdings LLC’s and its 19 TV stations it significantly boosts its television business as it looks to sell its newspaper operations.
Tribune currently owns 23 TV stations and the deal will make it the country’s largest commercial TV station owner with 42 stations.
Tribune Co. said it expects the deal to boost its profits immediately and result in more than $100 million in annual cost savings within five years. Local TV’s holdings include stations in Denver, Cleveland and St. Louis.
Meanwhile, the Chicago company said the increased scale will help it maximize its national and local advertising sales, while also giving it a larger footprint to distribute its video and digital content.
“This is a transformational acquisition for Tribune — it makes us the No. 1 local TV affiliate group in America, expands the distribution platform for our high-quality video content, and extends the reach of our digital products to new audiences across the country,” Tribune Co. President and CEO Peter Liguori said in a statement posted on WNEP’s website.
A call to WNEP General Manager Chuck Morgan for comment on how the sale will impact local operations was referred to a Tribune Co. official.
The newspaper sale is being done at the behest of a group of lenders that took over the Tribune as part of a bankruptcy reorganization.
The newspapers have been hurt by a shift that has driven more readers and advertisers to the Internet and mobile devices. The downturn in print advertising was one of the factors that caused Tribune Co. to file for Chapter 11 bankruptcy protection in 2008. It emerged from court oversight at the end of 2012.
Other traditional newspaper companies are also adding TV stations. Last month, Gannett Co., the publisher of USA Today, announced plans to buy TV station owner Belo Corp. for about $1.5 billion. If approved, the all-cash deal will make Gannett the fourth-largest broadcast group in the U.S.
Local TV, of Newport, Ky., is principally owned by private equity firm Oak Hill Capital Partners. The New York Times Co. struck a deal in January 2007 to sell its nine-station TV group, including WNEP, to Oak Hill Capital Partners for $575 million.
Bobby Lawrence, chief executive officer of Local TV, said the Tribune and Local TV are a good fit.
“Our cultures and operating philosophies are very similar, and we share a strong commitment to news and local programming excellence,” he said.
The deal, which remains subject to antitrust and Federal Communications Commission approvals, is expected to close by the end of 2013. Tribune Co. said it has received committed financing of up to $4.1 billion and expects the deal will be financed through a combination of debt financing and cash on hand.