The E.W. Scripps Company is buying national broadcast network Ion Media for $2.65 billion. Warren Buffett’s Berkshire Hathaway is investing $600 million.
The two parties believe the acquisition will yield $500 million in synergies over the next six years. The deal is expected to close in the first quarter of 2021.
Ion, which is based in West Palm Beach, Florida, and reaches more than 100 million homes, offers mostly crime and justice-procedural programming. Ion owns 124 affiliated TV stations in 62 markets. Scripps operates 60 television stations in 42 markets.
To comply with FCC (Federal Communications Commission) rules, Scripps already has a deal in place to sell off 23 Ion stations.
“This evolution of Scripps’ national television networks business, through the combination of ION, the Katz networks and Newsy, repositions the company in the television landscape,” said Scripps President and CEO Adam Symson. “With its strong revenue growth, high margins and significant cash flow, ION will make Scripps a more powerful and durable media business with significant near-term benefit as well as long-term value. ION Media is a distribution double threat – carried on cable and satellite through must carry while also capitalizing on cord-cutting and the growth of free over-the-air broadcasting. This transaction is another in a long list of Scripps’ transformative moves to where we see opportunity for growth and to benefit from the evolving media landscape.
“For more than 70 years, Scripps has been dedicated to local broadcasting and the markets we serve with an unparalleled commitment to quality objective journalism, community service and stewardship of the public’s airwaves,” he continued. “Now, with this national broadcasting acquisition, Scripps will be the largest holder of broadcast spectrum, poised to take an even greater leadership role in the development of future business models that leverage ATSC 3.0 and spectrum to benefit the American people.”
“As the media industry continues its rapid evolution, Berkshire Hathaway is fortunate to partner with this management team and the Scripps family, who have successfully anticipated the future of media for over a century,” Berkshire’s Ted Weschler said.
“We have created tremendous shareholder value while managing debt through asset sales and high-cash-flow revenue streams such as retransmission fees and political advertising, working all the while to maintain a flexible balance sheet in order to capitalize on our next opportunity,” Scripps CFO Lisa Knutson added. “Now we are building an even stronger financial foundation that will allow us to act as leaders in the future of the television industry while we serve our audiences and consumers in effective and efficient new ways.”