By: Ellen Liburt
823 Million dollar price tag sets a record
Young Broadcasting Inc. beat out a legion of media behemoths to buy San Francisco’s KRON-TV and a 51 percent interest in the BayTV cable channel for a record-busting 823 million dollarsin a deal announced Nov. 16.
Young, which also owns independent Los Angeles station KCAL and 10 other midsize stations, tendered 650 million dollars cash and 173 million dollars in Young Broadcasting stock to KRON parent Chronicle Publishing Co. for the NBC affiliate.
The purchase price, which easily topped the previous high paid for a TV station ? the 485 million dollars CBS paid Gaylord Entertainment Co. for KTVT-TV in Dallas last April ? hoists Young’s U.S. coverage to 11.3 percent from 9 percent.
“I, along with a lot of people in the investment community, was surprised that Young actually did win the station,” said Robin Flynn, a media analyst with Paul Kagan Associates in Carmel, Calif. “I think it was a great deal for Young. The multiple they paid was a bargain for the top-rated station in the fifth-largest [U.S.] market.”
The multiple, approximately 10-to-1 on a cash-flow basis (assuming some tax and operational savings on the station) compares with an industry average of around 15-to-l. Also sold within the week were TV stations KAKE in Wichita, Kan., and WOWT in Omaha, Neb., both bought by Benedek Broadcasting of Rockford, Ill. for an undisclosed price.
The 24 heirs of San Francisco Chronicle co-founder Michael H. de Young have now completed the sale of all Chronicle Publishing’s holdings for a grand total of more than 2 billion dollars, according to industry estimates.
Among the Chronicle Publishing properties auctioned off since June are the 482,000-circulation flagship paper, to the Hearst Corp. for 660 million dollars, in a deal awaiting federal antitrust review; The Pantagraph, a 50,000-circulation paper in Bloomington, Ill., along with a group of seven community papers, to Pulitzer Inc. for 180 million dollars; the 109,000-circulation Telegram & Gazette in Worcester, Mass., to the New York Times Co. for 295 million dollars; and the Osceola, Wis.-based Motorbooks International subsidiary to private New York investment firm Flagship Partners Inc. for an undisclosed price.
San Francisco-based Chronicle Books is the only piece of the company to remain in family hands: It was sold for an undisclosed price Nov. 15 to its own editor in chief, Nion McEvoy, a great-grandson of Michael de Young.
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(copyright: Editor & Publisher November 20, 1999) [Caption]