WFSB sold in $2.7B deal

The corporate parent of WFSB is selling the Rocky Hill-based television station and 16 other broadcast outlets to Gray Television in a $2.7 billion deal, the companies said in a deal announced Monday.

Meredith Corp. is structured so the company is essentially selling off its entire portfolio of television stations, but keeping its National Media Group operating division, which owns the nation’s largest portfolio of magazines as well as digital and marketing assets, according to company officials.

While Gray Television, which is based in Atlanta, is acquiring all of Meredith’s outstanding shares, the Iowa-based company will spin off the National Media Group to its existing shareholders immediately before the close of the deal, which is expected to occur in the fourth quarter of this year.

The deal requires various regulatory approvals, most notably from the Federal Communications Commission.

In addition to WFSB, which is a CBS affiliate, the only other New England station that Meredith owns is WGGB in Springfield, Mass., which has an affiliation with both ABC and Fox as well as WSHM, a low power television station affiliated with CBS.

Of the 17 stations being sold, all but four are in the 40 largest television markets in the United States.

WFSB is part of the Hartford-New Haven market, which is the nation’s 32nd largest.

The deal will turn Gray Television into the nation’s second largest television broadcaster, serving 113 local markets and reaching approximately 36 percent of US television households.

Hilton Howell, Gray Television’s executive chairman and chief executive officer, said the Meredith television stations’ cultures and commitments to local markets “are highly complementary.”

“Building on our successes throughout 2020 and just the first few months of 2021, Gray Television clearly has an even stronger and brighter future than ever!” Howell said.

The merging of the two station portfolios will require Gray to sell only one of its existing television stations, WNEM in Michigan’s FlintSaginaw market.

Rich Hanley, an associate professor of journalism at Quinnipiac University, said Meredith is looking to consolidate its media holdings and is choosing the more profitable magazine business over local television. Meredith was founded in 1902 when it began publishing “Successful Farming” magazine and two decades later started what would become “Better Homes and Gardens” in 1924.

“Meredith’s expansion into television was always an odd one,” Hanley said. “What the magazine industry requires is a lot different than what local television stations require.”

Magazine are attractive to advertisers, he said, because they are designed not to be viewed on an impulse but rather “to become part of the fabric of lives of millions of people.”

“[Magazines] are designed to be read over the course of a week or in some cases, over a whole month,” Hanley said. “It’s a good vehicle for advertisers because unlike television, where the material being viewed is being consumed instantaneously. Consumer eyeballs have time to linger on the content as well as the advertising.”

Up until now, Gray’s television strategy has been to become the dominant station in small and mid-sized markets, he said.

“Its are stations number one in 70 of 94 the markets the company is already in,” Hanley said. “This deal gives them an enormous amount of power in the marketplace, both in terms of advertising and negotiating affiliate agreements.”

Affiliate agreements are deals that broadcasting networks strike with local stations to carry their national programming, he said.

“These agreements are worth a whole lot of money to the local stations,” Hanley said.

If approved by federal regulators, the sale of WFSB would represent the third time a television station in Connecticut has been sold in the last three years.

Texas-based Nexstar Broadcasting Group acquired WTNH and sister station WCTX in January 2017. WTIC Fox 61 and its sister station, WCCT, were acquired by Virgina-based Tegna in September 2019.

Of the four major commercial television stations in the Connecticut market, only WVIT NBC-CT will have the same owner during that time period if the Gray deal for WFSB goes through.

Hanley said the pace of television station sales in Connecticut show “that it is still an attractive market... It’s relatively stable and there is a decent enough amount of disposable income in the market to attract advertisers, particularly car dealers, who are the lifeblood of local television stations.”

Hanley said he doesn’t expect Gray executives to come in and make wholesale changes at WFSB. If anything, he said, Gray will probably come in and make investments in new technology and equipment.

“They won’t do anything flashy, but they will do what’s necessary to compete and keep the station at or near the top of the market,” Hanley said.