Meredith deal may be in jeopardy as Nexstar submits bid to acquire Media General
Morning Brief: Tribune Media, Media General and TEGNA face having their local TV stations go dark on some cable systems as negotiations to reach new carriage deals falter
That Meredith-Media General deal may hit the brakes if a rival broadcaster has its way. The Wall Street Journal is reporting that Nexstar Broadcasting Group has in a bid to acquire Media General, offering $14.50 a share for the company – mostly cash, but partially stock, as well. The deal is being valued at $4.1 billion.
The transaction we are proposing would be a transformational event for both Nexstar and Media General shareholders and would deliver superior, immediate and long-term value to Media General’s shareholders compared with Media General’s proposed acquisition of Meredith,” Perry Sook, Chairman, President and CEO of Nexstar, said in the company’s statement.
“Our proposal provides a significant premium to Media General’s shareholders, including a cash component nearly equal to Media General’s current share price,” Sook said. “Nexstar is already growing rapidly as a result of our organic and M&A initiatives, but a combined Nexstar/Media General would be even better positioned for long-term success in a dynamic and consolidating market and certainly better positioned to deliver shareholder value than a combined Media General/Meredith.
Nextstar, based in Irving, Texas, owned 91 television stations across the US, and is a relatively new company, having been founded in 1996. In 2012 it acquired 11 stations and Inergize Digital Media from Newport Television, and the following year bought several pother properties including Communications Corporation of America and other broadcast assets.
Should the Meredith-Media General deal fall through, it could create a problem for Meredith, which once was seen as a buyer of the Time Inc. magazine titles. Meredith may be in a position where it would consider a sale of print in order to acquire more local television properties.
Stephen M. Lacy, currently the CEO of Meredith, was slated to become Chief Executive Officer and President of the new Meredith Media General.
Nexstar’s bid is based on the idea that the combination of Nexstar and Media General is far better – at least as far as broadcasting is concerned – than a Meredith-Media General deal. In its press release, Nexstar provided a chart which compared the two deals:
Noticeably missing: anything about print properties.
Several broadcasters, including Media General, may see their some of television properties pulled from cable offerings over a failure to secure new carriage deals.
Media General’s problems are with DirecTV, which is now owned by AT&T. Media General owns stations in San Francisco, Buffalo, Austin and elsewhere. As is the usual practice in these negotiations, the TV provider has positioned the broadcaster as the bad guy (which it often is), attempting to ask for more money to retransmit the stations than the cable or satellite company is willing to pay.
“Rest assured, we intend to keep your local Media General-owned broadcast station in your local DIRECTV line-up but, by law, must first receive permission from Media General,” DirectTV said to customers on its website. “Media General is threatening to block your station’s signal unless they receive more than double the current fees just to allow you to keep the same shows you’ve always had. Media General has briefly suspended its channels from other satellite and cable providers before, but our immediate goal is to resolve this matter behind-the-scenes without involving you.”
Tribune Media, which is the broadcast side of the old Tribune Company, has no new deal with AT&T U-Verse. Its stations in Chicago, Los Angeles, San Diego, Washington DC, Dallas and New Orleans could be pulled. Earlier this month Tribune Media reached a new deal with Cablevision.
TEGNA, the broadcast side of Gannett, is negotiating with Dish Network and owns stations in Washington DC, New Orleans, Atlanta, Dallas, and other markets.
Interestingly, Apple was said to be eager to get local TV stations to be part of its new Apple TV streaming service, but was having a difficult time getting the networks to play ball. It may, by now, have concluded that dealing with those companies that own local TV stations is not worth the hassle. This probably forced Apple to pivot from having its Apple TV announcement be more about apps, as well as its new Apple TV model, than about a new streaming service. Apple may be able to force the owners of local TV stations to voluntarily build apps for their stations or risk lower viewership as customers cut the cord and stop subscribing to cable and satellite systems.
The announcement that Oyster would be shuttering its eBook subscription service means that there is one less player in the space. One of those players, Scribd, last week updated its iOS app.
Despite the update, a couple of users have complained inside iTunes that the app is crashing, but overall the app has still received far more positive reviews than negative ones.
Last month Scribd announced that it was changing its audiobooks program.
“Starting on September 20, you will receive one audiobook credit as part of your monthly subscription to use toward any title in Scribd’s audiobook catalog,” Scribd’s CEO Trip Adler told subscribers online.
Although the change means less access to audiobooks, the company is trying to put a positive spin on the change:
“This change will not only allow us to continue to grow our audiobook catalog in a sustainable way, but will also allow us to focus on even more content deals and offerings we know you’ll love.”