Time Warner to Sell TV Station Amid AT&T Merger
February 23 2017 - 6:56PM
Dow Jones News
By Keach Hagey and John McKinnon
Time Warner Inc. agreed to sell its Atlanta television station
to Meredith Corp. for $70 million, removing a significant factor
that could have prompted the Federal Communications Commission to
review Time Warner's $85 billion sale to AT&T Inc.
The FCC's new chairman, Ajit Pai, hasn't yet said whether he
plans to have the agency review AT&T's acquisition and declined
to comment on what impact the Atlanta station sale might have on
any possible FCC review.
"This [sale] is news to me, so it will not surprise you if I
don't express an opinion about it on the fly," he said Thursday at
a press conference following the FCC's monthly meeting.
Investors are closely monitoring whether the blockbuster merger
will be subject to FCC review because such an examination would be
broader and possibly tougher than the Justice Department's expected
antitrust review.
The station sale was announced Thursday in a filing with the
FCC, which has the right to review any transfers of
television-station licenses and evaluate whether such deals are in
the public interest. The Atlanta station, WPCH, is Time Warner's
only broadcast television station. Formerly named WTBS, it was the
station that Ted Turner turned into a national "superstation" and
that he used to build out national cable empire Turner
Broadcasting, which is now a unit of Time Warner.
"We're pleased to add WPCH-TV, a station with a rich history, to
the Meredith portfolio," Meredith Local Media Group President Paul
Karpowicz said in a statement.
From Time Warner's perspective, "this is a very small deal that
helps remove a big overhang for the pending" deal with AT&T,
wrote Marci Ryvicker, an analyst at Wells Fargo. "It means one less
issue for the FCC to review, specifically the transfer of WPCH's
license" to AT&T.
Time Warner has dozens of other FCC licenses, having to do with
things such as satellite-uplink technology, but Time Warner
executives have said they don't believe these need to be
transferred to AT&T because of technological advances since the
licenses were given out.
Time Warner and AT&T filed statements last month saying:
"While subject to change, it is currently anticipated that Time
Warner will not need to transfer any of its FCC licenses to
AT&T in order to continue to conduct its business operations
after the closing of the transaction."
Executives from both companies have said they expect the deal to
close this year.
President Donald Trump, while still a candidate, vowed to block
the deal, saying, "AT&T is buying Time Warner, and thus CNN, a
deal we will not approve in my administration because it's too much
concentration of power in the hands of two few."
Meredith said it has been running the day-to-day operations of
the station -- including advertising sales, marketing and technical
operations -- since 2011. Meredith already owns another station in
Atlanta, the CBS affiliate WGCL-TV, so the purchase will give them
the efficiencies of scale of a "duopoly," according to Ms. Ryvicker
at Wells Fargo. She expects the station to maintain its TBS
affiliation.
Meredith said it expects the station deal to close by June
30.
--Jeffrey A. Trachtenberg and Tom Gryta contributed to this
article.
Write to Keach Hagey at keach.hagey@wsj.com and John McKinnon at
john.mckinnon@wsj.com
(END) Dow Jones Newswires
February 23, 2017 18:41 ET (23:41 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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