Meredith Corp. has taken key steps on the path to selling off its TV stations and making the rest of the corporation part of a New York-based media conglomerate.
The company, headquartered in Des Moines since its founding in 1902, received clearance from the Federal Communications Commission on Friday for the $2.83 billion sale of its local broadcasting division to Gray Television.
The same day, a waiting period required under an antitrust law expired for the separate deal under which digital media company IAC/Interactive Corp will buy Meredith’s magazine division for $2.7 billion and combine it with IAC subsidiary DotDash, a digital publisher, creating a new company, Dotdash Meredith, under DotDash CEO Neil Vogel.
Meredith said in a news release Monday that it expects to close both agreements by Dec. 1. Unlike the Dotdash deal, the sale to Gray requires approval from Meredith’s shareholders Nov. 30.
About the Gray sale
Atlanta-based Gray will receive 17 TV stations in 12 markets as part of its purchase, including a presence in major cities like Atlanta, Kansas City, Missouri, Nashville, Tennessee, and St. Louis. Meredith has no Iowa TV stations.
Deals for local TV stations require FCC approval to ensure that one company doesn’t dominate the airwaves in any community.
A single company can add multiple stations within the same local market, as long as none of them are among the four most popular at the time of the deal. According to the FCC, the Gray-Meredith deal would have only broken that rule in the Flint, Michigan, market. But Gray agreed to sell its Flint station WJRT to Allen Media Holdings in September, clearing the path for FCC approval.
More: Meredith Corp. scores extra $125 million in renegotiated deal with Gray Television
Gray attorneys also contended that the company’s purchase of Meredith’s stations will be good for viewers. Those stations will use reporting from Gray’s Washington, D.C., bureau, as well as its investigate TV staff.
The company added that local stations in smaller parts of some states will now get segments about political activity in the Legislature because the acquisition bring to Gray reporters assigned to cover the state capitals of Georgia and Tennessee.
Two people objected to the deal. One said consolidation of broadcasting companies ultimately hurts viewers because news stations become too similar. Another argued that TV stations refuse to sell ads to antenna companies because those businesses hurt cable and satellite providers.
The FCC wrote that the objections were not valid. The criticism about media consolidation was too broad, the regulators argued. And the argument about antenna advertisements did not include enough evidence.
Kevin Latek, Gray’s chief legal and development officer, said in an email Monday that the two companies have now cleared all government requirements for the deal, but they still need to finish “standard contractual closing conditions.”
“The parties are working aggressively to close the transaction on December 1st, and we expect to meet that date,” Latek said.
Meredith’s local TV stations have averaged about $864 million in revenue over their three most recent fiscal years, about 29% of the company’s total revenue during that time.
About the Dotdash sale
As announced in October, Meredith’s magazine division will be purchased by IAC/Interactive Corp., which is owned by billionaire studio executive-turned-tech mogul Barry Diller.
Though publicly traded, IAC operates as an incubator where digital companies grow to profitability before a lucrative spinoff for investors. Some of the company’s recent wins include the spinoff of video platform Vimeo and the Match Group websites, which include Tinder.
More: Here’s what to know about Meredith’s new boss, Neil Vogel
The Meredith acquisition cleared the waiting period imposed under an antitrust law known as the Hart-Scott-Rodino Act. The law requires companies that are merging to file notifications with the Federal Trade Commission and the U.S. Department of Justice. The agencies can extend that waiting period if they want, a step they did not take with the Meredith sale.
Executives for both companies say the $2.7 billion sale will marry the strengths of both sides. Dotdash takes over household-names publications including People, Travel + Leisure and Better Homes and Gardens. At the same time, those publications will get Dotdash’s digital expertise, which Dotdash executives say should make them more profitable.
More: What Dotdash’s purchase could mean for Des Moines’ Meredith Corporation: Bringing ‘an outsider view’
The company is known for building service journalism websites with relatively few ads, making the websites fast and allowing them to achieve high rankings in Google algorithms.
Some of Dotdash’s better-known titles include The Spruce, Investopedia and Serious Eats.
Meredith’s magazine division has averaged about $2.14 billion in revenue during its three most recent fiscal years, about 71% of the company’s total revenue during that period.
Tyler Jett covers jobs and the economy for the Des Moines Register. Reach him at [email protected], 515-284-8215, or on Twitter at @LetsJett.
https://www.desmoinesregister.com/story/money/business/2021/11/15/meredith-corporation-selling-tv-stations-gray-television-magazines-iac-clears-regulations/8623402002/
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