Gray To Acquire Schurz Communications, Inc.'s Television And Radio Stations

[Mr Tony]

Gray is on a shopping spree
http://gray.tv/index.php?page=press-releases&releaseid=2087675

Gray Television, Inc.announced today that it has reached an agreement to acquire all of the television and radio stations of Schurz Communications, Inc. ("Schurz") for approximately $442.5 million including working capital at closing.

Schurz and Its Broadcast Stations:

Schurz is a diversified and privately-owned communications company based in Mishawaka, Indiana, that owns television stations, radio stations, daily and weekly newspapers, cable companies and a telephone directory in medium and small sized markets throughout the U.S. The company began in 1872 when Alfred B. Miller and Elmer Crockett founded the South Bend Tribune, and their descendants still own the firm today. Schurz emerged as a broadcast pioneer in 1922 with the launching of WGAZ radio (now WSBT) in South Bend. Gray will not acquire any non-broadcast assets or businesses from Schurz.

In particular, the transaction announced today covers the following television and radio stations and operating agreements:

• In the Wichita, Kansas, market (DMA 65), Schurz owns KWCH-TV and three satellite stations that serve as the market's CBS affiliate. KWCH-TV is the top-ranked and highest grossing station in the market. Schurz also owns KSCW-TV, the market's CW affiliate, and it provides sales and other services to Entravision's KDCU-TV, the market's Univision affiliate. Gray already owns KAKE-TV and two satellite stations, which serve as the Wichita market's ABC affiliates. To facilitate regulatory approval, and prior to the Gray/Schurz closing, Gray will sell KAKE-TV and its assets to another broadcaster. After such sale, KAKE-TV will be owned and operated completely independently from Gray.
• In the Roanoke-Lynchburg, Virginia, market (DMA 69), Schurz owns WDBJ-TV, the market's CBS affiliate, and the number-one ranked and highest grossing station in the market. Through the acquisition of WDBJ-TV, the transaction will add a third Virginia market to Gray's portfolio.
• In the Springfield, Missouri, market (DMA 75), Schurz owns KYTV (known locally as KY3), the market's NBC affiliate, and KCZ, the market's CW affiliate. KY3 is the number-one ranked and highest grossing station in the market. Schurz provides sales and other services to Perkin Media's KSPR-TV, the market's ABC affiliate. Springfield will be Gray's first television market in Missouri.
• In the South Bend, Indiana, market (DMA 96), Schurz owns WSBT-TV, the market's CBS affiliate and the number-one ranked and highest grossing station in the market. Because Gray also owns NBC affiliate WNDU-TV in South Bend, Gray will seek another experienced television broadcaster to acquire WSBT-TV. After the closing, WSBT-TV will be owned and operated completely independently from Gray and WNDU-TV.
• In the Augusta, Georgia, market (DMA 112), Schurz owns WAGT-TV, the market's NBC and CW affiliate. Gray owns WRDW-TV, the market's CBS affiliate. Over time, Gray expects to consolidate WAGT-TV's operations with Gray's existing operations in this market. Gray anticipates that the FCC license for WAGT-TV will be offered in the upcoming FCC spectrum auction, with the proceeds from such auction, if any, payable to Gray.
• In the Anchorage, Alaska, market (DMA 148), Schurz owns KTUU-TV, the market's NBC affiliate. KTUU-TV is the number-one ranked and highest grossing station in the market – as well as the most-watched and highest grossing station in the state of Alaska. It will become Gray's first television station in Alaska.
• In the Rapid City, South Dakota, market (171), Schurz owns KOTA-TV and three satellite stations, which serve as the market's ABC affiliate. KOTA-TV is the number one ranked and highest grossing station in the market. Gray anticipates combining KOTA-TV's operations with those of Gray's KEVN-TV, the market's FOX affiliate.

 

[Mr Tony]

Change is likely coming to the Black Hills TV dial as a result of Gray TV's purchase of Schurz Communications' TV and radio holdings nationwide for $442.5 million.

Gray already owns FOX affiliate KEVN/7 (Rapid City) and Schurz owns ABC affiliate KOTA-TV/3 (Rapid City). FCC rules do not allow one company to own more than one of the top four full-power stations in a market, and KOTA-TV and KEVN are the top two stations in town; they are the market's two oldest stations and each has its own news operation.

Gray's press release says it anticipates combining KOTA-TV's operations with KEVN but does not specify exactly what will happen. In several other markets, including Bismarck and Fargo, Gray has moved a purchased station's programming to a subchannel of its existing station and divested the purchased station to another group. It also simulcasts the Bismarck subchannel on low-power stations, and Gray recently purchased a low-power station in Rapid City.

The deal also includes "KOTA Territory" satellites KHSD/11 (Lead, SD), KSGW/12 (Sheridan, WY), and KDUH/4 (Scottsbluff, NE). Gray already has holdings in the Cheyenne-Scottsbluff market, but it's not immediately clear how KDUH might be affected since it's a satellite station. KEVN also has one satellite, KIVV/5 Lead.

Gray's buying spree over the last few years has netted it stations in every South Dakota, North Dakota, Nebraska, and Wyoming-based market, including multiple big-four network affiliations in the Fargo, Bismarck, Lincoln, North Platte, and Cheyenne markets. It will have stations in 49 markets nationwide once this and other transactions are completed.

 

[Mr Tony]

I like how in the press release they (gray) specifically list out what they are going to do in markets where there is a conflict......except in Rapid City

• In the Rapid City, South Dakota, market (171), Schurz owns KOTA-TV and three satellite stations, which serve as the market's ABC affiliate. KOTA-TV is the number one ranked and highest grossing station in the market. Gray anticipates combining KOTA-TV's operations with those of Gray's KEVN-TV, the market's FOX affiliate.

Gray bought a LP station a couple months ago. Gray owns FOX which has no subs. ABC (Schurz) has Me & This as subs.
They possibly put FOX on the LP and as a sub on KOTA (which would possibly displace a existing sub.....)

 

[Mr Tony]

One thing with the acquisition if IF they put FOX as a sub on ABC in Rapid City/Lead this will bring FOX OTA to 2 new markets via the satellite stations

KDUH Scottsbluff, Nebraska has ABC, CBS and PBS (although PBS is off the air....tower collapse). There is no FOX OTA there

KSGW Sheridan, WY has ABC (times 2), CBS and PBS. NBC is analog low powered (and owned by Gray). Again no Fox yet they have 2 ABC stations there.
There is a translator of K2 ABC out of Casper that logs as 2-1
There is a translator of CBS2 out of Billing, MT that also logs as 2-1 & 2-2 (CW)

 

[Mr Tony]

Well now we know at least what happening in rapid city and Scottsbluff


Gray already owns FOX affiliate KEVN/7 (Rapid City) and to comply with ownership caps, it intends to move KOTA-TV's ABC affiliation to KEVN-LD/23 (Rapid City, formerly KIVN-LD), which would continue to be relayed on KOTA-TV satellites KHSD/11 (Lead, SD) and KSGW/12 (Sheridan, WY). The KOTA-TV license will then either be sold or returned to the FCC.

Current KOTA-TV satellite KDUH/4 (Scottsbluff, NE) will instead become a satellite of Gray NBC affiliate KNOP/2 (North Platte, NE), a move Gray says will improve the availability of Nebraska news to "orphan counties" in the panhandle that are in the Denver market.

Gray would retain KEVN satellite KIVV/5 (Lead, SD) as well as KSTF/10 (Scottsbluff, NE), which is a satellite of CBS affiliate KGWN/5 (Cheyenne, WY). The company says it should be allowed to own two full-power stations in both of those cities because the stations would be operated as satellites.

 

[Mr Tony]

the FCC document if you want to read it

https://licensing.fcc.gov/cdbs/CDBS...?appn=101687178&qnum=5120&copynum=1&exhcnum=1

 

[Mr Tony]

Gray already owns FOX affiliate KEVN/7 (Rapid City) and to comply with ownership caps, it intends to move KOTA-TV's ABC affiliation to KEVN-LD/23 (Rapid City, formerly KIVN-LD), which would continue to be relayed on KOTA-TV satellites KHSD/11 (Lead, SD) and KSGW/12 (Sheridan, WY). The KOTA-TV license will then either be sold or returned to the FCC.

well now we know what they'll do with that LP station they bought in January
One note the Rapid City area already gets KOTA via a translator (18) so the effect on the Rapid City proper by going to a LP station is minimal. Its the folks outside of the area who rely on it via the main RF2 station will be hurt.
This will be kinda rare where the "mothership" is a LP relaying full power satellite stations.

Current KOTA-TV satellite KDUH/4 (Scottsbluff, NE) will instead become a satellite of Gray NBC affiliate KNOP/2 (North Platte, NE), a move Gray says will improve the availability of Nebraska news to "orphan counties" in the panhandle that are in the Denver market.

That is very smart of Gray to do that. As noted in the FCC document

In addition to satisfying the presumptive standard, Gray also can attest to unique
compelling circumstances that justify authorizing KDUH-TV to operate as a satellite for
KNOP-TV. Historically, much of western Nebraska has been assigned to the Denver DMA. Thus,
much of the “local” news provided by other broadcasters for residents of western Nebraska
originates from several hundred miles away in Denver. Although KDUH-TV has provided some
local news and information programming for its viewers, KDUH-TV has operated as a
semi-satellite for KOTA-TV in Rapid City, South Dakota. Thus, much of the news on the station
is produced in Rapid City with a South Dakota focus. Combining KDUH-TV with KNOP-TV and
using resources from Gray’s stations in Lincoln (the capital of Nebraska and home of the
University of Nebraska) and Omaha (Nebraska’s largest city) will reorient the station squarely to
serving its Nebraska viewers, and it will bring a tremendous in-state presence to these “orphan
counties” in western Nebraska. KDUH-TV will be the premier (and only) source of in-state local
news for many residents in western Nebraska. Indeed, Congress recently acknowledged the value
of providing television broadcast station signals that originate in from an in-state station.

But that brings in a question. What will be carried on the channel? Currently KDUH carries ABC -1, Me -2 and This -3. KNOP has NBC -1 and Fox SD -2
We know NBC will be on it. Will they go NBC -1, FOX SD -2 and even continue to have ABC still on a -3? If they do that, this will give Scottsbluff all 4 nets (right now there is only ABC & CBS)

 

[Trip]

Gray doesn't have the rights to Fox in the Cheyenne-Scottsbluff market, so they'd likely not repeat the Fox subchannel. My guess is that they'll just run NBC on 4-1. I wouldn't rule out simulcasting KSTF on it, whether just CBS or CBS and CW, since KDUH has a much, MUCH larger coverage area.

- Trip

 

[Mr Tony]

Gray doesn't have the rights to Fox in the Cheyenne-Scottsbluff market, so they'd likely not repeat the Fox subchannel.

oh shoot you're right. But I thought maybe they could because there is no FOX affiliate remotelly close to Scottsbluff.

Where I am (Aitkin County, MN) we're the Minneapolis market yet there is a FOX 21 (KQDS) analog translator there. K39GG
You can get the KMSP/WFTC translator in Brainerd (K48IF) with an outdoor antenna

My guess is that they'll just run NBC on 4-1. I wouldn't rule out simulcasting KSTF on it, whether just CBS or CBS and CW, since KDUH has a much, MUCH larger coverage area.

What about ABC? It would just disappear from the area? Or maybe move it to KSTF's RF station (if they move CBS to KDUH)

 

[Trip]

KLWY is the Fox affiliate for the market, even though it doesn't have OTA coverage in that part of the market.

Assuming they don't simulcast KOTA on a subchannel, ABC belongs to KLWY/KKTQ-LD in the market. I'm assuming KDUH is grandfathered.

- Trip

 

[Mr Tony]

Assuming they don't simulcast KOTA on a subchannel, ABC belongs to KLWY/KKTQ-LD in the market. I'm assuming KDUH is grandfathered.

I realize Cheyenne ABC is technically the ABC in the market. But doesnt KDUH fall into the category of like Tampa and Grand Rapids, MI where there are 2 ABC stations owned by different companies in the same DMA? (I didnt mention Lincoln and Grand Island, NE just because of the confusion of that market)

Also had another question...more of a FCC technical question. Why couldn't Gray take KSTF CBS and instead of it being a satellite of the Cheyenne CBS (KGWN)...make it a satellite of the CBS in North Platte like they are going to do with KDUH (make it a satellite of KNOP) so folks get Nebraska news (I guess it would be redundant for news purposes)?

 

[Trip]

I think it's different since KDUH and KSTF are both satellites, and I don't know how that would impact things exactly.

I guess if they wanted to try to get Scottsbluff placed into the North Platte DMA, they could try to shift KSTF to CBS simulcasting KNPL-LD. It's actually not a bad idea, but I'm wondering if the FCC wouldn't balk at them simulcasting ABC in the market as well, thus leading to a monopoly on the big 4 where there previously was not one.

- Trip

 

[Stargazer]

Sinclair owns both ABC WCHS TV-8 and FOX WVAH TV-11 here in my market and they both went dark recently due to a dispute. I thought two stations in one market was not allowed.

 

[Mr Tony]

Sinclair owns both ABC WCHS TV-8 and FOX WVAH TV-11 here in my market and they both went dark recently due to a dispute. I thought two stations in one market was not allowed.

technically FOX is owned by Cunningham but run by Sinclair.

To answer your question there are 2 scenarios
If there are 8 full power stations in the market you CAN own 2 stations outright (as long as they are both not in the top 4 stations in the market).

The smaller markets the FCC is cracking down on stations owning one and running another. If someone runs into this where they would own 2 of the top 4 stations in the market the FCC wont let them anymore. Thats how companies like Gray are getting around it by buying the assets (everything but the license) and then moving that programming to either a subchannel of a station they own or putting it on a low power station (which you CAN own a full power and a LP station)...as in the Rapid City example above and in places like Fargo, ND Wausau, WI and Lincoln Nebraska they moved the programming to their own station and made it a subchannel. They then sold the "old" stations to other companies.

By the end of next year the stations that do like you have in your market have to make some changes. The new FCC rules that ban one top-four station from selling more than 15 percent of the advertising on another top-four station.

I'm sure Trip can verify and correct my errors

 

[Trip]

Sounds right to me!

- Trip

 

[Mr Tony]

Well Gray took care of the issues with dupoloies
In the South Bend, Indiana, market (DMA 96), Schurz owns WSBT-TV, the market's CBS affiliate and the number-one ranked and highest grossing station in the market. Because Gray also owns NBC affiliate WNDU-TV in South Bend, Gray will seek another experienced television broadcaster to acquire WSBT-TV. After the closing, WSBT-TV will be owned and operated completely independently from Gray and WNDU-TV.

well they are doing a swap with Sinclair for the NBC/FOX in Marquette, MI

NBC/FOX affiliate WLUC/6 (Marquette) is getting a new owner as part of a swap between Sinclair Broadcast Group and Gray TV. Gray announced Thursday that it will get WLUC in exchange for WSBT/22 (South Bend, IN), which Gray is receiving as part of its purchase of Schurz Communications. Gray already owns WNDU/16 (South Bend) and will keep WNDU, with Sinclair taking over WSBT. Though the South Bend market has nearly four times the population of the Marqette market, Gray says WSBT and WLUC are roughly equal in terms of cash flow due to WLUC's dominance of the Upper Peninsula TV market. WLUC carries NBC on 6.1, FOX on 6.2, and Grit TV on 6.3.

 

[Mr Tony]

Kansas they are swapping with a station in Knoxville, TN

In the Wichita, Kansas, market (DMA 65), Schurz owns CBS affiliate KWCH-TV and Gray owns ABC affiliate KAKE-TV. Gray previously announced its intention to acquire KWCH-TV and divest KAKE-TV.

Gray has now reached an agreement with Lockwood Broadcast Group, Inc. ("Lockwood") to sell all of KAKE-TV's assets in exchange for the assets of Lockwood's WBXX-TV and $11.2 million in cash. WBXX-TV is the CW affiliate for the Knoxville, Tennessee, market (DMA 62), where Gray owns CBS affiliate WVLT-TV. This swap will provide Gray with a second owned television station in our company's largest market, and the cash component will slightly lower our effective purchase price for the Schurz acquisition. Gray and Lockwood will not enter into any form of shared services agreement, such that KAKE-TV will be owned and operated completely independently from Gray following the closing of this transaction.

 

[Mr Tony]

And in Rapid City they figured it all out

The Black Hills' oldest TV station, KOTA-TV/3 (Rapid City), is being sold off for $1 as part of Gray TV's purchase of KOTA-TV owner Schurz Communications. Gray owns FOX affiliate KEVN/7 (Rapid City) and had already announced that it would divest KOTA-TV and move its ABC programming to KEVN, which could carry ABC on a subchannel and/or a new low-power TV station. The company announced Thursday that the KOTA-TV license, along with the rights to its MeTV and This TV channels and some property, will be sold to Legacy Broadcasting for $1. Gray and Legacy have done business in similar situations before, with Legacy taking Gray's divestiture castaways in the Bismarck and Lincoln markets last year. Gray anticipates the transactions will be completed in the fourth quarter of this year or the first quarter of next year.

So what that means is satellite folks in the Rapid City area will probably get MeTV on locals once this is done as it will be a -1 station.

 

[Mr Tony]

press release

http://gray.tv/index.php?page=press-releases&releaseid=2092306

 

[Mr Tony]

Well Gray took care of the issues with dupoloies
In the South Bend, Indiana, market (DMA 96), Schurz owns WSBT-TV, the market's CBS affiliate and the number-one ranked and highest grossing station in the market. Because Gray also owns NBC affiliate WNDU-TV in South Bend, Gray will seek another experienced television broadcaster to acquire WSBT-TV. After the closing, WSBT-TV will be owned and operated completely independently from Gray and WNDU-TV.

well they are doing a swap with Sinclair for the NBC/FOX in Marquette, MI

NBC/FOX affiliate WLUC/6 (Marquette) is getting a new owner as part of a swap between Sinclair Broadcast Group and Gray TV. Gray announced Thursday that it will get WLUC in exchange for WSBT/22 (South Bend, IN), which Gray is receiving as part of its purchase of Schurz Communications. Gray already owns WNDU/16 (South Bend) and will keep WNDU, with Sinclair taking over WSBT. Though the South Bend market has nearly four times the population of the Marqette market, Gray says WSBT and WLUC are roughly equal in terms of cash flow due to WLUC's dominance of the Upper Peninsula TV market. WLUC carries NBC on 6.1, FOX on 6.2, and Grit TV on 6.3.

one note this probably means Gray will upgrade "Fox UP" to HD. Right now it is in SD OTA (bu there is a HD feed for cable companies)

Also I wonder if Gray will keep "Grit" as a sub. They dont (currently) have any affiliates with Grit. Me, This and Antenna are already in the market