LIN TV CEO Gary Chapman on Thursday defended his company’s decision to buy five television stations from Emmis Communications for $260 million, arguing that the company will realize cost savings that could make the purchase price look relatively cheap.

Mr. Chapman noted that when LIN paid $85 million to purchase two UPN stations from Viacom earlier this year, the price amounted to about 26 times cash flow. However, thanks to starting a news operation at one of the stations and duopolizing the other station, the company has been able to wring out enough cost savings to bring the equivalent purchase price down to about eight times cash flow.

He expects similar efficiencies to be squeezed out of the five stations LIN is purchasing from Emmis, by duopolizing in markets where the company can do so, and by operating the stations out of operational hubs where appropriate.

His comments came as LIN reported a 74 percent drop in third-quarter profit to $3.8 million but posted flat revenue results of nearly $91 million.

The company said it was able to offset the decline in political advertising and Olympics-related revenue with the addition of the two UPN stations purchased from Viacom earlier this year. In addition, the company got a lift from its Internet advertising business and from its MTV Puerto Rico channel, which posted strong advertising gains.