New York Times agrees to sell TV stations
Cory Bergman January 4th, 2007
The New York Times Company has agreed to sell its nine television stations to Oak Hill Capital Partners for $575 million. “We believe… that our focus now should be on the development of our newspapers and our rapidly growing digital businesses and the increasing synergies between them,” said Janet L. Robinson, president and CEO of The New York Times Company. The stations are WHO-TV in Des Moines, KFSM-TV in Ft. Smith, WHNT-TV in Huntsville, WREG-TV in Memphis, WQAD-TV in Moline, WTKR-TV in Norfolk, KFOR-TV in Oklahoma City, KAUT-TV in Oklahoma City and WNEP-TV in Scranton. Oak Hill Capital Partners is a private equity firm. “We look forward to maintaining the standard of excellence that The New York Times Company has achieved over the last 30 years,” said J. Taylor Crandall, a managing partner of Oak Hill Capital Partners. Press release follows below…
PRESS RELEASE –The New York Times Company has entered into an agreement to sell its Broadcast Media Group, consisting of nine network-affiliated television stations, their associated Web sites and the Digital Operating Center, to Oak Hill Capital Partners for $575 million. The transaction is subject to regulatory approvals and is expected to close in the first half of 2007.
The Broadcast Media Group comprises the following stations:
WHO-TV in Des Moines, Iowa (NBC)
KFSM-TV in Ft. Smith, Ark. (CBS)
WHNT-TV in Huntsville, Ala. (CBS)
WREG-TV in Memphis, Tenn. (CBS)
WQAD-TV in Moline, Ill. (ABC)
WTKR-TV in Norfolk, Va. (CBS)
KFOR-TV in Oklahoma City, Okla. (NBC)
KAUT-TV in Oklahoma City, Okla. (MyNetworkTV)
WNEP-TV in Scranton, Penn. (ABC)
“These are strong, well-situated stations with very talented employees,” said Janet L. Robinson, president and CEO of The New York Times Company. “Over the years they have provided their communities with high-quality programming and have contributed significantly to our financial performance. We believe, however, that our focus now should be on the development of our newspapers and our rapidly growing digital businesses and the increasing synergies between them.”
J. Taylor Crandall, a managing partner of Oak Hill Capital Partners, said, “The New York Times Company Broadcast Media Group is one of the industry’s most admired franchises because of its heritage television stations, its commitment to quality news and serving the local community, and its outstanding employees. We look forward to maintaining the standard of excellence that The New York Times Company has achieved over the last 30 years.”
Goldman, Sachs & Co. acted as financial advisor, and Morgan, Lewis & Bockius LLP and Covington & Burling LLP acted as legal advisors to The New York Times Company. UBS Investment Bank acted as financial advisor and Dow Lohnes PLLC acted as legal advisor to Oak Hill Capital Partners.
About The New York Times Company
The New York Times Company (NYSE: NYT), a leading media company with 2005 revenues of $3.4 billion, includes The New York Times, the International Herald Tribune, The Boston Globe, 15 other daily newspapers, nine network-affiliated television stations, two New York City radio stations and 35 Web sites, including NYTimes.com, Boston.com and About.com. The Company’s core purpose is to enhance society by creating, collecting and distributing high-quality news, information and entertainment.
About Oak Hill Capital Partners
Oak Hill Capital Partners is a private equity firm with more than $4.6 billion of committed capital from leading entrepreneurs, endowments, foundations, corporations, pension funds and global financial institutions. Robert M. Bass is the lead investor. Over a period of nearly 20 years, the professionals at Oak Hill Capital have invested in more than 50 significant private equity transactions. Oak Hill Capital is one of several Oak Hill partnerships, each of which has a dedicated and independent management team. These Oak Hill partnerships comprise over $20 billion of investment capital across multiple asset classes, including private equity, special situations, high yield and bank debt, venture capital, real estate, a public equity exchange fund and a global fixed income and equity hedge fund.
23 Comments Add your own
1. Jason | January 4th, 2007 at 4:16 pm
How much do you want to bet this will be the beginning of the end for these stations?
2. Safran | January 4th, 2007 at 4:21 pm
I don’t know about that, but I do know that capital firms don’t run TV stations. They buy and sell them. I’m guessing the more likely route is selling off the stations to various bidders.
3. nakedeye | January 4th, 2007 at 6:11 pm
Sell the TV stations and what does that do to the web strategy which they never fully formed?
As for it beging the beginning of the end for the nine, the capital group that bought them will sell them and if they are Vs or Us with good cable position they will survive.
Those stations’s news operations will become the endangered aspects of the stations.
News costs to do. P:rogramming does not so I’d worry if I were any one of those nine NDs or parts of their staffs.
4. quo vadimus | January 4th, 2007 at 6:39 pm
7 of the 9 station’s programming is run from a central location at WTKR in Norfolk VA. Basically it is one big master control in one room. It was designed to save the group money on operating cost and so far, it has. The cost of breaking that system down would be in the millions and take more than a year. On top of that, the newsrooms in most of the stations will not be in danger. Oak Hill bought network contracts along with all of the stations. Networks like CBS will not allow a local affiliate to just go away. In my opinion it seems Oak Hill is interested in seeing if they can make the group more profitable. Under the New York Times the group had an operating profit of 33 million last year. Also, TV stations require a lot of capital investments. One of the stations needs a new sat truck and a digital editing system. Trying to sell the stations off one by one would take years and end up costing a lot of money. No matter what happens, this will be interesting to see how Oak Hill handles the group. Oh and another variable to keep in mind: people like Bill Gates and Phil Knight have invested in a private equity fund with Oak Hill, along with other investors the amount was enough to but the group. Coincidence?
5. Dan | January 4th, 2007 at 8:40 pm
“We believe… that our focus now should be on the development of our newspapers and our rapidly growing digital businesses and the increasing synergies between them,”
Yeah, there’s certainly no “synergy” between video
delivery businesses and news. And certainly no reason to be concerned about local news delivery against lame local newspaper operations.
Did I just lose all respect of the NYT company,
I’d say I did.
Let’s keep our newspapers that are
going down the proverbial hell hole because we don’t
understand what business we are in, and let’s throw out the businesses that make the most cash flow
and have the potential to replace newspapers
with their station web operations that already have
the potential to include local video coverage
ready to go.
Yes, this was a very wise move
Dan
6. Cory | January 5th, 2007 at 12:34 am
I agree to a point, Dan, but newspapers are leaps and bounds ahead of TV stations when it comes to the digital realm, both in traffic and revenue. How many TV sites in their markets beat the newspaper site? Hmmm, Denver and Raleigh and maybe one other market.
That said, TV stations are leaps and bounds ahead of newspapers with holding the line on revenue growth.
7. discreet_chaos | January 5th, 2007 at 4:20 am
Cory; I agree with your point, but though I don’t have any figures, if WRAL beats the News & Observer in web revenue, I think you’d have to narrowly define the source.
The N&O has a very active blog site (blogs[dot]newsobserver[dot]com), they have a local search that you’ve mentioned (triangle[dot]com), plus they do their classifieds through classads[dot]triangle[dot]com and they have a community interest site at ncneighbors[dot]com.
I’m sure they probably have more sites under their umbrella that I haven’t seen and I can think of a couple that are no longer.
Way back in the early days of the web and before any of the big players got involved, WRAL and the N&O partnered to form Interpath which was a statewide ISP and like so many things from NC, it was backdoor underwritten by state government. That’s one of the reasons that I’d say both companies are so web-savvy. They were there and they both were cutting-edge from Day 1. When McClatchy bought the N&O, I thought it’d slow down, but the larger company nibbled-up the folks from nando[dot]net and there may have been a pause, but it seems full-steam ahead.
WRAL may beat the N&O, if you stick with just the main domain and focus primarily on local eyes. But, I’m a native of the area and I read the N&O several times a week and I only watch WRAL’s newscasts a couple of times a month. So, I don’t have any figures and there may be a disparity in pricing, but I don’t know that the television beats the newspaper in number of eyes, unless maybe, you just count those in the Raliegh/Durham market.
8. thedetroitchannel | January 5th, 2007 at 5:58 am
discreet, have they figured out how to present you with new mexico advertising while you are reading up on raleigh?
just curious.
9. discreet_chaos | January 5th, 2007 at 6:08 am
Unfortunately detroit, no and perhaps to make matters worse; The Abq Journal’s site is paid subscribers only (I thought there was a workaround and I tried to put a link into my supplementary blog this evening, but the article quit loading and I had to swear-off linking to their site) and there’s three news stations for most of the state, along with three degrees of service.
There’s a lot of good newspaper and a few good television sites across the country, but however you slice that bread, with both WRAL & the N&O, Raleigh has a lot of places beat.
10. discreet_chaos | January 5th, 2007 at 6:12 am
PS) Though Norfolk isn’t anything to sneeze at by any means, but like most places, I’d think the newspaper would win like Cory said.
And BTW to the person up top; I’ve also lived in the Virginia Beach market a couple of times and though I don’t automatically think of WTKR, I’m sure nobody is going to let the affiliate go.
11. thedetroitchannel | January 5th, 2007 at 6:32 am
hey, that wral site looks different.
dayport-ish, no?
12. Rocker | January 5th, 2007 at 7:19 am
I’d like to challenge this prevailing wisdom that “local newspaper websites dominate local TV websites”, although I’ll concede that in general newspaper sites are better. You have to remember though that in most markets there is effectively one major newspaper, and 4 (ABC, NBC, CBS, Fox) affiliate sites and often fairly serious efforts by CW stations as well. I don’t have all the numbers to do the math, but I suspect that in many markets if you added the TV side up it would either win or certainly be a lot closer. So, the statement that “local newspaper blows away local TV online” is really not accurate. From a revenue perspective, this mirrors the traditional offline world too, where the big newspaper in most towns has long had billing comparable to all the TV stations in town combined (and that would be understood to be the fair comparison, not one newspaper vs. one TV station). As a side note, that traditional newspaper revenue dominance was largely driven by classifieds (like 50%) and a couple of key categories like retail, automotive and movies…all now fleeing in droves.
13. Anony Mouse | January 5th, 2007 at 5:59 pm
Newspaper sites beat TV sites because of their verticals. The jobs, real estate, classifieds power their numbers. Another dirty little newspaper secret: they push slideshows which run up the page view counts faster than a video view which is a different experience but still counted the same way.
14. WebGirl | April 7th, 2007 at 12:21 pm
Newspaper sites beat TV sites for two simple reasons: The sites are more robust and the web departments are well-staffed. Period. The NYT is an excellent example of this. NYT Digital supports the entire online edition of the paper. The NYTBG web departments are very leanly staffed, in most cases with just one web producer. If Oak Hill expect to make any money on the stations’ websites, they are going to have to invest capital — both human and technological — or the sites will continue to tread water like they have been doing. One need only look to WRAL.com and the size of their web staff (both content and sales) to see that the adage, you get what you pay for is true. Time will tell if Oak Hill — unlike the NYT — will do more than just pay lip service to the importance of the web.
15. Athan | May 17th, 2007 at 4:06 am
Interesting…
16. Konstandinos | May 17th, 2007 at 8:37 am
interesting
17. Leontios | May 21st, 2007 at 11:28 am
Cool.
18. Panicos | June 5th, 2007 at 7:42 am
Nice
19. Dimitri | June 11th, 2007 at 8:46 pm
Cool.
20. Eleftherios | June 12th, 2007 at 10:01 pm
Cool…
21. Koinos | June 13th, 2007 at 6:59 pm
Cool…
22. Preved! | August 11th, 2007 at 10:28 am
Hello
Bye
23. Kostas | August 12th, 2007 at 6:21 pm
Nice!
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