Tribune stated yesterday that it will add 19 more TV stations from Local TV Holdings LLC for $2.73 billion cash. After the purchase Tribune would become the largest TV owner in the US broadcasting 42 channels. Tribune will now have stations in large markets such as New York, Los Angeles, Miami, Cleveland, Denver, Seattle and will reach the most households in the United States.
The TV stations collect transmission fees from cable companies which are looking to broadcast their programs, being one source of revenue besides advertising.
“Retrans is a growing stream of revenue,” said Benchmark Co analyst Edward Atorino. “Internet revenue a few years ago was peanuts; now its getting into tens of millions of dollars. Mobile TV revenue is on the horizon.” he added for Reuters. Tribunes CEO Peter Liguori said the deal “clarifies and accelerates Tribunes strategy for growth.”
Tribunes TV stations reported in 2012 revenue of $1.1 billion, more than a third of the companys total $3.1 billion.
Tribunes big acquisition deal also triggered speculation over a sell of its newspaper business which has attracted a interest from potential buyers, including two of the worlds richest business people, Charles and David Koch, known for their conservative views.
“We are looking at all our strategic options when it comes to newspapers,” Liguori said. “Im an operator, and we are going to operate newspapers at the highest levels possible. M&A is our night job; we know what our day job is.”, he explained for Reuters.
Tribune shares advanced by 5.45% yesterday at close.