Beleaguered owner of St. Louis and Moline stations sold to hedge fund
Financial hedge fund owner Standard General announced Tuesday it has acquired Virginia-based Tegna, Inc. for $8.6 billion. The deal means the company is being taking private, so it would no longer be trading on Wall Street.
An affiliate of Standard General will pay $24 for each Tegna share. The deal is valued at $5.4 billion, and the assumption of debt is $3.2 billion – thus the $8.6 billion price tag.
Tegna owns 64 stations in 51 markets and also owns digital networks Quest, Twist, and True Crime (formerly Justice Network). While Tegna doesn’t own any Chicago stations, it does own two stations covering the state of Illinois: ABC affiliate WQAD in Moline (part of the Quad Cities market) and NBC affiliate KSDK St. Louis, whose coverage area includes a significant portion of the state known as MetroEast, home to East. St. Louis and Bellville. Other big-market stations Tegna owned include WUSA Washington D.C., WXIA/WATL Atlanta, WTHR Indianapolis, and KING/KONG Seattle among others. Standard General is also acquiring WBNS-AM/FM, a pair of sports talkers in Columbus, Ohio (along with sister WBNS-TV, of course.)
The station group had its roots in the old Gannett station group, who merged with Belo in 2013. After Gannett split its television and newspaper properties (similar to what Tribune did), the former was renamed Tegna.
As a result of the sale, Tegna is divesting three Texas stations to Atlanta based Cox Media Group – former Belo flagship WFAA Dallas-Fort Worth in the nation’s fifth-ranked market, the largest non-ABC owned station in the country by market size; CBS affiliate KHOU Houston; and ABC affiliate KVUE Austin. Cox is also acquiring ABC affiliate WLNE in Providence, R.I. from Standard General in a trade for Fox affiliate WFXT, necessary given the close proximity between the Boston and Providence markets. After two separate stints owning WFXT, Fox swapped the station to Cox in 2014 for KTVU San Francisco.
Cox is also acquiring three other stations from Standard General: KBSI Cape Girardeau, Mo.; KLKN Lincoln, Neb.; and WDKA Paducah, Ky. Cox’s majority owner is another hedge fund, Apollo Global Management – who also is part of the group buying Tegna, but in a very small role.
Deb McDermott becomes the new CEO of Tegna, replacing Dave Lougee in the role. The Tegna name is expected to be retained.
The sale caps off a turbulent time for Tegna since being spun-off from Gannett. For one, the name of the station group -similar to when Tribune Publishing was renamed Tronc – was widely mocked when announced. Tegna was also criticized for making changes to its stations to attract younger viewers while alienating older ones. Lougee was criticized for a lapse in judgement for mistaking Adonis Hoffman – who was then a chief of staff for FCC commissioner Migyon Clayburn, as a valet at an industry event. Hoffman – who is Black, did accept an apology from Lougee but stressed the need for diversity, which was lacking at Tegna and criticized the company’s board for failing to investigate the incident. It’s one of the reasons Standard General – who was an active investor in Tegna, had seen enough and had battled Tegna for control of the company’s board seats for the last two years.
The company has produced programming for their stations, but with a spotty tack record. Tegna’s Daily Blast Live is in all 51 of their markets and is modestly successful. On the other hand, weekly American Idol clone Sing Like A Star lasted only one season as viewers were in the process of shifting away from weekend non-sports programming.
Tegna has also been known to get involved in disputes with cable and satellite distributors, resulting in the company removing their signals. In the last two years alone, Tegna has had spats with DirecTV and Dish (both since resolved). Another recently resolved dispute with Mediacom left Tegna stations off of their systems for fourteen months.