KXAN for Sale?
Parent company of local NBC affiliate KXAN-TV announces plans to explore sale of company, as market forces continue to pummel local television industry
Around the country, midsize broadcasters are cashing out. The New York Times Corp. recently sold its nine TV stations, and Texas-based Nexstar Broadcasting Group, owners of 49 stations, recently said it was also exploring a sale. "There is a view this is the top of the market," David Bank, a managing director at RBC Capital Markets in New York, told the Reuters news agency. "I don't think the core advertising business is getting better, so operators are deciding to get out."
LIN, based in Providence, R.I., posted a rare $20.7 million profit in its most recent quarter, after struggling in recent years. In Securities and Exchange Commission filings, the company detailed a litany of issues hindering its growth, including increased competition, a heavy debt load, and declining national advertising revenue. "Excluding political advertising, we received 32% of our advertising revenues from national advertisers in 2006 compared to 37% in 2004," the company said in its most recent quarterly report. "We expect this trend to continue."
A creation of the private equity firm of Hicks, Muse, Tate & Furst, LIN went public in 2002 and went on a mini buying spree of stations. Now it's likely to go private again, part of a wave of purchases fueled by private equity companies looking to flip businesses with ready cash flow. Shares of LIN jumped 14% after the announcement of a possible sale.
KXAN general manager Eric Lassberg declined comment. "No decision has been made to sell the company at this time," LIN said in a press release, which also noted that the company is "unable to predict if this review of strategic alternatives will result in any transaction."