By: Editorial Staff HEARST CORP. HAS agreed to spend $520 million to buy Argyle Television Inc.'s six stations and Tribune Co. has spent $21 million to increase its stake in the WB Network to 21.9%
Hearst, the closely held company based in New York, said it would merge Argyle's stations with its own to create a company with 15 stations, reaching nearly 12% of U.S. homes with TVs, and annual revenues of about $369 million, $285 million from Hearst's stations, $84 million from Argyles'. The stations churn profit margins of about 40%.
Federal Communications Commission rules require that two stations be sold.
Hearst will own 86% of Hearst-Argyle Television Inc. and Argyle will own the rest. Since the new company's shares will be traded publicly, the deal will require Hearst to file Securities and Exchange Commission documents that promise to provide the first public glimpse into the inner workings of an unusually private media company. Its newspaper holdings include the San Francisco Examiner and Houston Chronicle.
In the WB Network purchase, Tribune exercised an option to increase its holdings, from 12.5%, in the fledgling network it owns with the Warner Brothers unit of Time Warner Inc. Another option allows Tribune, which owns 16 TV stations and is a major outlet for the networks' programming, to increase its stake to 25%.
WB Network has lost $165 million in its two years of operations.
web Site: http://www.mediainfo.com.
copyright Editor & Publisher; April 12, 1997
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