CBS to Create New York City Duopoly with Agreement to Buy WLNY-TV
CBS said it agreed to buy WLNY-TV Riverhead, N.Y. a full power DTV station on Long Island. The station has pay-TV distribution around the New York, Connecticut and New Jersey region, and is not affiliated with a major broadcast network. CBS also owns WCBS-TV New York. Terms weren’t disclosed, but Wells Fargo analyst Marci Ryvicker said the transaction was a smart one for CBS to make. Owning two stations in the largest U.S. media market, CBS could probably increase margins at the two stations by 10 basis points, and potentially increase revenue at WLNY-TV by adding new programming and through retransmission consent revenue, she said.
Sign up for a free preview to unlock the rest of this article
Communications Daily is required reading for senior executives at top telecom corporations, law firms, lobbying organizations, associations and government agencies (including the FCC). Join them today!
The deal takes off the table one of the few remaining independently owned TV stations reaching the country’s largest market. “There are a smattering of signals here and there, but WLNY is the closest to the core and probably the most attractive target,” an industry executive said. “If you're CBS and looking in New York City for a full power TV station, what else are you going to buy?"
The deal probably has nothing to do with federal plans to auction TV spectrum, another broadcast industry executive said. Though some TV groups have been purchasing stations in markets where “there are more stations than there would be remaining channels” should the government reclaim a significant amount of spectrum from the TV band through an incentive auction, that’s probably not what motivated CBS, the executive said. “The big guys aren’t going to buy stations as a spectrum hedge,” the executive said.
Instead, CBS is more interested in creating a duopoly in New York, as it has in Los Angeles with KCBS-TV and KCAL-TV, the executive said. But, should the government authorize incentive spectrum auctions, deals like the CBS-WLNY-TV transaction could drive up spectrum prices for stations that choose to participate, the executive said. “The more stations that are owned by people not planning on selling spectrum … then the spectrum value to voluntary sellers should go up, the executive said.
CBS plans to add resources to WLNY-TV “to fuel a significant expansion of local news programming, well beyond the nightly half-hour that currently airs,” said CBS TV Stations President Peter Dunn. “We also look forward to having a bigger and better news bureau on Long Island that will be a terrific resource for WCBS,” he said.
WLNY-TV operates on channel 47 but is typically carried on pay-TV lineups on channel 55 or 10. The transaction requires FCC and other approvals, CBS said. If approved, it will bring to 10 the number of markets where CBS owns more than one TV station.