Hearst and Gannett talk merger

Jul 15, 2002  •  Post A Comment

Hearst-Argyle and Gannett may once again be talking about combining their station groups.
After narrowly missing a completion of a merger last year, the two groups are considering restarting preliminary discussions about a merger now that the duopoly rules have been eased, high-placed sources told Electronic Media. The number of stations in the resulting combined group would be close to the 35 percent cap approved by the Federal Communications Commission.
According to one source involved with the situation, a year ago the two companies met to consider the merger. Both are already part of an alliance with NBC to carry programming and both have been targeted by many analysts as high-profile acquisitions for studios seeking to expand their national station presence. However, talks broke down over duopoly issues as well as over who would have control over the new entity.
Together, the station groups would form a powerful new entity that could ultimately mean fewer jobs for talent, as a merger would represent yet another case of consolidation in a shrinking
field of players and voices.
“The mix of groups would be terrific for all sides of the discussions,” said the source. “There is very little overlap, but both companies have strong-minded executives who would want to run things their way.”
Although most people involved with the companies still consider any move to be “in the far distance,” or hadn’t heard of any revival of talks, an executive at one of the companies said “the idea still makes our guys salivate.”
Both companies have approximately 171/2 percent coverage of the country. Any merger would provide the companies with a duopoly in Greensboro, N.C., likely no longer an issue with the FCC, as well as a triopoly in Sacramento, Calif. Hearst-Argyle currently owns Sacramento’s successful KCRA-TV NBC affiliate and the less successful KQCA-TV, a WB affiliate. Meanwhile, Gannett owns KXTV, the ABC affiliate in the market.
In addition, cross-ownership rules for newspaper publishers and broadcasters would be in effect as Gannett owns newspapers throughout the country in addition to its stations. Meanwhile, Hearst-Argyle Television owns 24 television stations and manages an additional three television stations and two radio stations.
Personnel at KQCA have said they are hearing that the station may be sold or swapped soon. The station’s 10 p.m. newscast was recently shut down, which could be a result of the company divesting its resources from the station. However, sources said that if a deal is indeed in the works, the companies may spin off a separate company to handle station duties.
Still, the final obstacle to the deal could be a hefty one. “Everything could fall in line perfectly if it wasn’t for these pesky executives,” joked a source,who added that there may be movement by the fourth quarter.
A spokesman for Hearst-Argyle said that as a matter of policy the company does not comment on speculation. A spokesperson for Gannett could not be reached for comment late Friday.
Michele Greppi contributed to this report.