Meredith Could Eye More Broadcast Stations After Time Inc. Deal

Meredith Corp.'s $2.8 billion agreement to purchase publisher Time Inc. won't curtail the media company's broadcast station appetite, chair and CEO Stephen Lacy said on a conference call with analysts to announce the deal.

We also have the capacity for additional acquisitions, especially on the broadcast side where we already have a couple of deals in the works, Lacy said on the call.

Related: Meredith Agrees to Buy Time Inc.

Meredith has about 17 broadcast stations, dwarfed by mega station groups like Sinclair Broadcast Group (193 stations) and Nexstar Media Group (170 stations). Meredith had been a seller as early as 2015, when it agreed to be purchased by Media General in a merger of equals valued at about $2.4 billion. But that deal was scrapped when Nexstar swooped in with an offer to buy Media General for $4.6 billion. That transaction closed in January.

Related: FCC Approves Nexstar-Media General Merger

The Time Inc. purchase is being backed in part by Koch Equity Partners, the private equity arm of controversial billionaire conservatives the Koch brothers. While the Kochs have pledged not to get involved in the editorial operations of the combined companies-and they will not receive a board seat-their $650 million contribution to the deal could free up cash for future station buys.

Not that Meredith necessarily needs help - it reported record revenue in 2016 - about $1.7 billion - and has grown profits by 15% annually over the past five years.

But scale has been just as big a deal driver in the station business as it has the cable business, and the ability to add more stations to the portfolio can only help.

The Time deal also adds another key aspect to Meredith's business - TV content. In addition to publishing businesses like Time, People and Sports Illustrated to add to its own magazine portfolio, which consists of household names like Better Homes & Gardens and Family Circle, the deal gives Meredith a foothold in the cable network business. Earlier this month Time launched Sports Illustrated TV on Amazon Channels.

Other station groups have branched out into the cable business to help preserve retransmission consent fees for its broadcast properties, most notably Sinclair which purchased the Tennis Channel in 2016 and could add to that lineup with its pending deal to buy Tribune Media.

LINK:	http://www.broadcastingcable.com/news/currency/meredith-could-eye-more...
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