Tribune Co. bought WTTV (Ch. 4, Ind.) Bloomington/Indianapolis, a...
Tribune Co. bought WTTV (Ch. 4, Ind.) Bloomington/Indianapolis, and satellite WTTK-TV Kokomo (Ch. 29, Ind.) from Sinclair Bcst. Group for $125 million (38 times cash flow), companies said. Sinclair described stations as “nonstrategic television assets.” “Since we were not…
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able to create a duopoly in the Indianapolis/Bloomington market, it made more sense at this time to exit and provide Tribune the opportunity to get the longer term benefit of having a duopoly there,” Sinclair CEO David Smith said. Tribune owns WXIN (Ch. 59, Fox) Indianapolis. “The Indianapolis duopoly significantly increases Tribune’s presence in that market,” Tribune TV Pres. Pat Mullen said. Tribune COO Dennis FitzSimons said: “By creating a 2-station cluster in Indianapolis we have immediate opportunities to reduce costs and improve revenue, which makes the purchase price very attractive in today’s environment.” Deal, creating Tribune’s 4th duopoly, is expected to be funded with proceeds from sale of Denver radio stations to Entercom Communications. Tribune, meanwhile, said broadcast operating profit fell to $71.9 million in first quarter, from $88.8 million year ago, and broadcast revenue to $283.5 million from $290 million. Standard & Poor’s issued bulletin saying that Tribune faced potential tax liability of about $880 million as result of adverse IRS ruling on reorganization of 2 subsidiaries. If liability is upheld, S&P said, it would “negatively affect” Tribune’s debt rating.