Ownership
of TV 8 revamped

Listen to this article

In a $160 million deal, the company that operates WROC-TV 8 will have a new ownership structure for its stations that could substantially expand the organization.
Smith Broadcasting Group Inc.’s four stations currently are owned by Jupiter/Smith TV Holdings, a company jointly controlled by Smith Broadcasting Partners and Jupiter Partners L.P., a New York City-based private-equity firm.
Hicks, Muse, Tate & Furst Inc., a private investment firm in Dallas, has signed a definitive agreement to acquire WROC, plus stations in Flint, Mich., and Monterey, Calif. from Jupiter/Smith. A fourth station, in Steubenville, Ohio, will be acquired by a separate entity controlled by Smith Broadcasting Group, which has primary offices in Santa Barbara, Calif. and St. Petersburg, Fla.
Completion of the transactions is expected in early 1997 and is pending Federal Communications Commission approval, among other steps. Under the deal, Robert Smith, president of Smith Broadcasting, will become president of a yet-to-be-named firm to be formed by Smith and Hicks, Muse.
Smith will be joined in the Hicks, Muse-funded venture by his co-investors and partners, including John Purcell, Smith’s senior vice president and general manager of WROC, the local CBS affiliate.
The firm will manage the four properties and also will pursue other middle-market television station investment opportunities. Hicks, Muse wants to build a stable of television properties valued at $500 million to $1 billion.
“(Hicks, Muse) has substantial expertise, and an outstanding track record, as buy-and-build investors in the radio broadcasting industry and many other industries,” Smith said in a prepared statement. “We’re pleased and honored to join forces with them as Hicks, Muse applies that model to the television broadcasting industry, where our experience and that of Hicks, Muse are highly complementary.”
Hicks, Muse formed Chancellor Broadcasting Co. Inc. three years ago. It now is a $1 billion public company. Earlier this year, it also formed Capstar Broadcasting Partners, another radio broadcasting company.
Hicks, Muse has 60 pending transactions in a number of industries, including the branded-food business, with an aggregate value in excess of $10 billion.
The Smith Broadcasting deal is the firm’s first venture into the television broadcasting business.
“Hicks, Muse has had significant success as an investor in various types of media-related businesses, and we look forward to participating for the first time in the rapidly consolidating television industry,” said Thomas Hicks, chairman and CEO of Hicks, Muse.
“In doing so, we are pleased to be partnering with Bob Smith and his colleagues, who have done an excellent job of acquiring and successfully managing television stations over a period of many years,” Hicks said. “We believe that the properties being acquired will serve as an excellent platform upon which this company will be built.”
Media experts predicted earlier this year that a change in FCC rules would spark interest in investing in the TV business and another round of consolidation in the industry. Companies now can control 35 percent of the U.S. market, up from 25 percent.
The Smith Broadcasting Group bought WROC, along with the Flint and Steubenville stations, from Television Station Partners L.P. earlier this year for $63.5 million. The group originally had sought to buy WHEC-TV 10, the NBC affiliate that was sold earlier this fall to Hubbard Broadcasting Inc. of St. Paul, Minn.
Smith has been involved with several other unrelated media ventures.