The FCC's Media Bureau has approved the Media General/LIN Media merger as well as all of the associated station sales in overlapping markets that are going to Hearst Television, Meredith Corp. and Sinclair Broadcast to comply with FCC local ownership rules.
Locally, Media General & LIN Media announced in August that they would be keeping WPRI-TV and WNAC-TV, which it operates, and would be selling WJAR-TV to Sinclair Broadcast Group. In early October, the shareholders of both companies approved the merger. By the end of October, the Justice Department announced that Media General had won U.S. antitrust approval to buy LIN after agreeing to divest television stations in five markets.
The deal was valued at $1.6 billion when it was announced in March, but was reduced by $110 million in August after LIN's WISH-TV in Indianapolis, IN lost its affiliation with CBS.
To win government approval for the deal, the companies have agreed to sell 7 television stations in 5 markets. The FCC said today it expected that to happen immediately following consummation of the Media General/LIN merger.
The FCC granted Media General four satellite exemptions to the rules as well as two failing-stations waivers, and a third to Sinclair.
Upon closing of the transaction, the combined company will retain the Media General name and remain headquartered in Richmond, VA. Shares of the new Media General will be listed on the NYSE and trade under the symbol MEG. LIN Media shares will cease trading and will no longer be listed on the NYSE.
LIN has 39 full-power TV stations and Media General 32 full-powers (as well as 22 Class A stations and over 100 low-powers). The post-merger Media General will have 68 full-powers plus the Class As and LPTVs.
The FCC said one of the public interest benefits of the deal was that the spin-offs would not create any new duopolies, suggesting duopoly avoidance is an FCC goal.
After the deal, the FCC pointed out, Media General will have three joint sales agreements that are now attributable as ownership interests and now violate local ownership rules in Youngstown and Dayton, Ohio, and Topeka, Kansas, but those JSAs have a couple years to unwind, so Media General will get a waiver and get to unwind them on that timetable. "[T]he Commission has previously found that temporary waiver of its ownership rules is appropriate so long as such waiver does not undermine the underlying goals of the Commission’s ownership rules: competition, localism, and diversity," the bureau said. "Based on the specific facts and nature of the transaction before us, we find that temporary waiver does not undermine any of these goals..."
J. Stewart Bryan III, Chairman of the Board of Media General, said, "We are pleased to have received FCC and DOJ approval for our merger with LIN Media. We will now move forward to quickly integrate our operations and build upon our shared values for providing relevant local journalism and deep community engagement, both of which strengthen our ties to viewers and advertisers. The powerful combination of two strong local television broadcasters enhances our leadership position as we compete in the rapidly evolving media landscape, thus enabling us to deliver greater shareholder value."
Vincent L. Sadusky, President and CEO of LIN Media, said, "With the final regulatory approvals received, we are focused on closing the merger and integrating our two companies. The new Media General will have significant national reach and scale, numerous synergies, a diversified portfolio and, importantly, opportunities to grow our industry-leading digital business. We have an experienced and talented management team that is already hard at work on plans to bring our two great, complementary cultures together."
WJAR-TV in Providence, RI is one of the stations that Media General will be selling, as LIN Media/Media General decided to keep WPRI-TV. Media General will close on the sale of WJAR to Sinclair Broadcast Group before the close of the merger.
Media General and LIN Media expect to close on the merger and associated divestitures on December 19, 2014.
