Journal, Scripps continue to fuel media merger frenzy

ScrippsTwo Midwest media companies combine as media merger frenzy continues to sweep the nation

In the latest media hookup, Milwaukee-based Journal Communications announced a merger with Cincinnati-based E.W. Scripps. With the merger, the newspaper division would be spun-off into a separate company.

Once everything is said and done, Scripps would would own and operate 34 television stations in 24 markets, and 35 radio stations in eight markets (none in Illinois.) The new Journal Media Group would operate newspapers in 14 markets, based in Milwaukee.

Currently, Journal owns The Milwaukee Journal-Sentinel; News/Talk/Sports outlet WTMJ-AM (which can be picked up in the Chicago area, especially after dark); adult contemporary music station WLWK-FM (once known as Top 40 powerhouse WKTI-FM); and NBC affiliate WTMJ-TV, which Journal signed on in 1947. Journal also owns NBC affiliate WGBA in Green Bay and CBS affiliates WTVF in Nashville and KMTV in Omaha, Neb.

With the purchase, Scripps would have a significant presence in the Midwest, with stations in Detroit; Cincinnati,; Cleveland; Indianapolis; Milwaukee; Omaha; Green Bay; and Lansing, Mich.

The combined company would not own any station in Illinois.

The Scripps-Journal marriage is the latest in one of the biggest media merger frenzies not seen since the mid 1980’s. Recently, broadcasters such as Media General, Tribune, and Sinclair have been merging with others to gain leverage over cable and satellite providers (in retransmission consent negotiations) and over studios and other program suppliers.

Meanwhile, the cable and satellite providers are playing their own game of merger mania with Comcast hooking up with Time Warner Cable and DirecTV hooking up with AT & T. Other companies (such as Cox Cable, Dish, and Charter) could also be on the block.

And then there’s the studios. Two weeks ago, 21st Century Fox’s Rupert Murdoch placed a bid to buy Time Warner, but was rejected because the bid was “too low”. However, this is n’t expected to stop Murdoch in his pursuit – he’ll likely come back with a sweeter bid in his attempt for a hostile takeover.

A Fox-Time Warner merger would mean the combined company would control 40 percent of the primetime programming on the major networks. It would also have a near monopoly on adult animation, with Fox’s animation (Family Guy, American Dad) in the same house as Adult Swim (Aqua Teen, Squidbillies.) And the syndication outfits of both companies would certainly merge.

With all the mergers and threats of mergers, this is increasingly becoming like a high-stakes auction in a game of “can you top this”?

This comes as more and more viewers are watching their programs on DVRs and video-on-demand services such as Amazon, Hulu, and Netflix – all are now producing original programming – and thus bypassing the middleman – the network affiliate. In order to stay competitive, stations have been expanding their local newscasts, which attracts blue-chip and political advertising as the networks eliminated network compensation a long time ago.

The Scripps-Journal merger is already bad news for studios as Scripps has dropped several expensive first-run syndicated programming for cheaper, in-house produced programming, such as Let’s Ask America and The List, and the recently launched The Now, which no doubt would be placed on Journal stations once the deal closes in 2015. For syndicators, this development makes the job of selling syndicated shows a lot tougher.

Two years ago, Scripps stations pulled the plug on Wheel of Fortune and Jeopardy!, which they deemed as too expensive. In Cincinnati, Ellen is moving from Scripps’ ABC affiliate WCPO to Hearst’s WLWT, the market’s NBC affiliate this fall. In Cleveland, Dr. Oz is switching from Scripps’ WEWS to Tribune’s WJW.

In an era where everything in the media business is now changing, this frenzy is only just the beginning.

 

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