New York Times to Sell 9 Local TV Stations (original) (raw)

Business|New York Times to Sell 9 Local TV Stations

https://www.nytimes.com/2007/01/04/business/04cnd-nyt.html

Jan. 4, 2007

The New York Times Company announced today that it had agreed to sell its nine local television stations to Oak Hill Capital Partners, a private equity firm, for $575 million.

In September, the Times Company announced that it would sell its Broadcast Media Group as it refocused its strategy on its newspaper and digital businesses. The deal, expected to close in the first half of this year, comes as the Times Company and other newspapers struggle to maintain advertising revenues and circulation.

“Our focus now should be on the development of our newspapers and our rapidly growing digital businesses and the increasing synergies between them,” Janet L. Robinson, president and chief executive of the Times Company, said in a statement.

Oak Hill Capital Partners, which was co-founded in the 1980s by Robert M. Bass and does not own other media assets, is one of several private equity firms that have expressed interest in media properties lately.

Like other newspaper companies, the Times Company has seen its advertising revenues and circulation come under pressure recently as consumers spend more time on the Internet. The company owns The New York Times, The Boston Globe and The International Herald Tribune as well as 15 local newspapers, 35 Web sites and two radio stations.

Since July, total ad revenues for the Times Company have been down more than 3 percent every month from the comparable month the previous year, reversing gains in the earlier months of 2006. As of November, advertising sales were down 0.8 percent for the first 11 months of the year when compared with the same period in 2005.

The Times Company reported in early December that its company-wide ad sales were down 3.8 percent in November from November of the prior year. Total ad sales were down 0.8 percent in the first 11 months of 2006 when compared with the same period in 2005. The Times Company’s stock closed at $23.34 today, down about 14 percent from a year ago.

In late December, Standard & Poor’s Rating Services lowered its rating for the Times Company’s long-term corporate debt from A- to BBB+.

The Times Company increased the prices that subscribers to The New York Times pay by 4 percent in the fourth quarter of 2006 and increased the price of the Sunday newspaper in the Northeast. The price increases are expected to produce about $12 million in additional revenue per year.

The broadcast group has been a profitable part of the Times Company. The nine television stations generated 139millioninrevenuein2005,about4percentoftotalrevenues,and,accordingtoaforecastissuedinSeptember,areexpectedtoaccountforabout139 million in revenue in 2005, about 4 percent of total revenues, and, according to a forecast issued in September, are expected to account for about 139millioninrevenuein2005,about4percentoftotalrevenues,and,accordingtoaforecastissuedinSeptember,areexpectedtoaccountforabout150 million in revenue in 2006, helped by political advertising spending.

The Times Company acquired the nine stations, which have 900 employees, over the past 35 years, beginning with a station in Memphis in 1971. The company most recently acquired a station in Oklahoma City in 2005. Four of the stations are affiliated with CBS, two with NBC, two with ABC and one with MyNetworkTV, which is owned by the News Corporation.

The Times Company is also in the process of selling one of its radio stations, WQEW, to ABC, a unit of the Walt Disney Company, for $40 million. That deal is expected to close in the first quarter of this year.

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