Media General Inc., a firm based in Virginia, has recently agreed to acquire Texas-based LIN Media LLC at an approximate price of $1.6 billion. Adjusted for an additional $968 million of debt, the acquisition will cost Media General approximately $2.6 billion. This deal is one of many recent acquisitions of local-television broadcasters across the country. In the past year, both Tribune Co. and Gannett Co. have made similar moves.
This buyout elevates Media General's share in the local television market to the second largest in the United States. According to a recent report regarding the deal, the 74 stations that Media General has newly acquired broadcast to 23 percent of the homes in the country. The move comes after the purchase of New Young Broadcasting Holding Co. for $860 million last year.
Similar acquisitions have become typical recently. The decision by cable companies to carry local broadcasts has made such companies more attractive to buyers, and the over $10 billion in buyouts in the past year are the result of companies seeking to claim a part of the promising new source of cash flow.
Under the right conditions, companies may be able to increase their revenue through business transactions. However, because of the large amount of assets often required for such actions, deals may become complex, and disputes may arise during negotiations. A party that plans on becoming involved in a complicated business deal may be able to work with a commercial business attorney who might be able to protect a client's interests throughout negotiations. That attorney might be able to review any information regarding the deal and inform a client concerning their rights or obligations in the transaction.
Source: Bloomberg Businessweek, "Media General to Buy LIN for $1.6 Billion Amid TV Merger Frenzy", Crayton Harrison, March 21, 2014