Local NBC/ABC affiliate WALB part of Gray purchase

ALBANY — In what Gray Television Inc. is calling a push into more markets to attract national advertising, the company announced Monday it would buy privately held Raycom Media Inc. in a cash-and-stock deal valued at $3.65 billion.

With the purchase, Atlanta-based Gray’s combined company will include 142 full-power television stations in 92 markets, allowing its reach into roughly a quarter of total U.S. television households and more than doubling Gray’s current reach. The transaction will impact local NBC/ABC affiliate WALB, a Raycom-owned station.

The deal comes at a time when the U.S. Federal Communications Commission is making it easier for media companies to buy TV stations in the same market and for local stations to jointly sell advertising time.

In November, the FCC voted to remove certain roadblocks to increased consolidation among media companies, potentially unleashing new deals among TV, radio and newspaper owners as they seek to better compete with online media.

Gray’s offer for Raycom, an employee-owned company based in Alabama, will consist of $2.85 billion in cash, $650 million in a new series of preferred stock, and 11.5 million shares of Gray common stock, the companies said.

Wells Fargo has underwritten $2.53 billion in debt financing for the deal.

The planned consolidation of the Gray and Raycom assets will create the third-largest portfolio of stations and markets in the United States, according to officials with Gray, who said the company will divest television stations in each of the nine overlapping markets to get antitrust approval for the deal, which is expected to close in the fourth quarter of 2018.

The Albany station is, according to reports, in one of the overlapping markets and will be sold. Those markets include stations owned by Raycom in Knoxville, Tenn.; Toledo, Ohio; Waco, Texas; Tallahassee, Fla.; Augusta; Odessa, Texas; Panama City, Fla.; Dothan, Ala., and Albany. The company did not indicate if it has a buyer for the Albany-based WALB property.

Messages left with WALB Executive Director Jim Wilcox Monday seeking comment were not returned by The Herald’s press time. Raycom officials have released no information on the Albany-based NBC/ABC affiliate, other than the announcement that Gray would put the property on the market.

Raycom reportedly plans to sell or spin off Community Newspaper Holdings Inc, its unit that owns community newspapers, as well as PureCars, a digital ad platform for the automotive industry. Gray said it will not acquire either unit as part of the deal.

Raycom President and Chief Executive Officer Pat LaPlatney will become Gray’s president and co-chief executive officer, along with Gray’s Hilton Howell.

“Combining our company with the excellent Raycom stations and the superb Raycom employees will create a powerhouse local media operation,” Howell, Gray’s chairman, president and CEO, said.

Gray’s television holdings will reportedly include stations in markets as large as Cleveland and Tampa, Fla., and as small as Presque Isle, Maine, and Ottumwa, Iowa.

The Gray announcement comes at a time that another major broadcaster, Sinclair Broadcast Group Inc., is awaiting approval from FCC and U.S. Justice Department for its $3.9 billion acquisition of Tribune Media Co.

Gray shares jumped 14.6 percent to a four-month high of $14.67 in early trading Monday.

Tessa GreenTessa Green