Gannett buys Belo for $1.5 billion, deal nearly doubles its broadcast portfolio

belogGannett is acquiring Belo Corp., which has 20 TV stations – nine in top-25 markets. The news release notes that the Gannett-Belo combination “creates a broadcast ‘Super Group,’ catapulting Gannett into the nation’s fourth-largest owner of major network affiliates reaching nearly a third of all U.S. households.”

Gannett will pay about $1.5 billion for all of Belo’s outstanding shares. The deal nearly doubles Gannett’s broadcast portfolio from 23 to 43 stations.

Here’s what Gannett CEO Gracia Martore sent to employees this morning:

Dear Colleagues,

I am pleased to share some very exciting news. Today we announced that we are acquiring Belo Corp. in a transaction that will further grow our Company and provide opportunities across all of our businesses. As you know, we have been successfully transforming Gannett into a diversified multi-media company with broadcast, digital and publishing components across markets nationwide, and this is another important step in the process.

For those not familiar, Belo is a large, well-respected broadcast company that owns and operates 20 television stations, the vast majority of which are in markets that will be new to us. Gannett and Belo share a common sense of purpose – both companies are focused on serving their communities. And as importantly, Belo shares our values and long and rich history of award-winning journalism, operational excellence and strong brand leadership./CONTINUES

With the addition of Belo’s stations, we are creating a “Super Group” with a combined 21 stations in the top 25 markets, including stations to be serviced by Gannett through sharing arrangements. We’ll be the fourth largest owner of major network affiliates, reaching nearly a third of all households in the nation. We’ll also become the largest group owner of both NBC and CBS affiliates, and will add four new ABC stations to our portfolio. The addition of Belo’s stations greatly increases our scale and nearly doubles our broadcast assets, including extending our reach into key high growth markets such as Texas and the Pacific Northwest.

Gracia Martore

Gracia Martore

This deal is about much more than Broadcast. It significantly expands the reach of Gannett overall. We will solidify our position as the largest local media company, employing the greatest number of journalists. Additionally, we will have a significant presence in 111 communities across the country, including in more than two-thirds of the top 25 markets. This increased reach will give us an even greater opportunity to leverage our hometown advantage and strong brand leadership across all of our businesses – publishing, broadcast and digital.

As we expand in this transformational way, we will remain focused on executing and investing in all of our strategic initiatives. They remain the pillars of the new Gannett. Additionally, we will continue to have the flexibility to pursue other investments that make sense down the road.

While we are extremely excited about the new doors this transaction opens for us, it is important to remember it is still subject to the approval of Belo’s shareholders and customary closing conditions, including regulatory review. For now, Gannett and Belo will continue to operate as separate companies. We expect to close the transaction by the end of the year and look forward to a smooth integration, especially given the complementary aspects of this combination and our shared sense of culture and values. Dave Lougee will run the combined group.

Dave and I will be hosting an Employee Town Hall at 2:00 p.m. Eastern today to talk with you further about this transaction and Gannett’s future. A live video stream of the Town Hall will be accessible on the intranet at gannett.gci.

We look forward to speaking with you later today.

Best Regards,