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Owner of the television station
Gray television
Inc.
GTN 10.16%
is buying Raycom Media Inc., another station owner, as part of a $ 3.65 billion transaction that they believe will create a company with the third-largest number of stations in the country.
This decision comes as the consolidation of the television industry continues, as the owners of stations seek to increase their influence with both broadcast networks, which provide much of their programming, and pay the distributors of TVs that carry their chains.
The industry is also struggling with a growing number of cord cutters, namely viewers who are terminating cable TV subscriptions and are more likely to watch online videos and use streaming services.
Also lead market discussions in the industry is
Sinclair Broadcast Group
Inc.
waiting for the acquisition of
Tribune Media
Co.
, which would create a leader that would reach 62% of US households.
Mr. Gray buys Raycom for total proceeds of $ 3.65 billion, including $ 2.85 billion in cash, $ 650 million in preferred shares and 11.5 million shares of Gray, valued at $ 147 million. $ 2 million Friday. In pre-market trading, Gray shares rose 22%. Raycom is the property of the employees.
The combined company will own 142 television stations in 92 US markets
Gray's shareholders will hold 89% of the company's economic ownership as a result of the agreement. The combined annual net income of the two companies, on average over two years, would have been about $ 2 billion.
In order to facilitate regulatory approval, Gray will sell television stations in the nine markets where both companies operate stations.
Pat LaPlatney, chief executive of Raycom, is expected to become president and co-CEO of Gray. Gray Chief Executive and President
Hilton Howell
will become executive chairman and co-chief executive officer of the amalgamated corporation.
Raycom also launched a sales or spin-off process for its community newspaper division, Community Newspaper Holdings Inc., which holds more than 100 titles in 23 states, as well as PureCars, a digital advertising platform for digital media. automobile industry.
Write to Austen Hufford at [email protected]
Write to Austen Hufford at [email protected]
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