Scripps acquires ION Media in billion-dollar deal

FILE - In this Jan. 31, 2006 file photo, floodlights light up the E.W. Scripps logo on the company's headquarters building in Cincinnati. Media company E.W. Scripps Co. said Monday, Aug. 10, 2009, it made a profit in the second quarter despite a decline in revenue.(AP Photo/Al Behrman, file)

The E.W. Scripps Company is planning on buying national broadcast network ION Media for $2.65 billion. The transaction will combine the business with Scripps’ Katz networks and Newsy to create a full-scale national television networks business.

Berkshire Hathaway will be making a $600-million preferred equity investment in Scripps to finance the deal and will also receive a warrant to purchase up to 23.1 million Class A shares, at an exercise price of $13 per share.

Together, these businesses will reach nearly every American through free over-the-air broadcast, cable/satellite, over-the-top and digital distribution, with multiple advertising-supported programming streams.

The coming together of these companies is also expected to produce synergies that reach as much as $120 million a year, moist of it in carriage fee savings associated with the Katz networks.

Scripps president and CEO Adam Symson said:

“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.
“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.
“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.”