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Still Aggressively Pursuing

Scripps/Cordillera Not Likely to Hit Regulatory Snags

E.W. Scripps’s $521 million buy of 15 TV stations from Cordillera Communications isn’t expected to run into regulatory problems. The deal and spinoffs acquired as part of the pending Gray Television/Raycom deal would put Scripps’ reach at 21 percent of U.S. households -- the cap is 39 percent -- and the Scripps purchase doesn’t include any overlaps or combinations that require top four approval from the FCC, Scripps executives said in a conference call and release Monday.

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Scripps doesn’t anticipate regulatory issues, said President-Local Media Brian Lawlor. It looks to follow a “very similar” path to Gray/Raycom, which also didn’t include overlaps or new top four combinations, said S&P Global analyst Justin Nielson. With no overlaps, the deal could be approved on delegated authority if there are no objections, industry lawyers said.

The deal involves 15 stations in 10 markets, and with Gray/Raycom divestitures gives Scripps 51 stations in 36 markets, said Scripps CEO Adam Symson. “Scripps will operate the No. 1-rated TV station in a third of its markets,” Lawlor said. The deal includes duopolies ranked in the top four in Montana and Texas, but each includes a low-power station and so won’t need special FCC approvals. Scripps isn’t buying Cordillera’s Tucson station because it has a duopoly in that market, Lawlor said. Other companies were interested in the Cordillera stations, Symson said.

Since the transaction includes stations in states like Louisiana that have off-year elections, it will help insulate Scripps from the boom-and-bust nature of political advertising revenue, Lawlor said. Scripps is enjoying political ad revenue of $130 million for 2018, up 70 percent from 2014, the last midterm year. The Cordillera stations include contested areas that will likely mean improved political ad revenue for 2020’s presidential election year, Lawlor said.

Symson repeatedly said that even after this deal and Scripps' recent purchase of audience measurement company Triton (see 1810170037), the company is “aggressively pursuing” opportunities to extend its reach through “a transformational acquisition.” Don't "count Scripps out as a buyer,” he said. That likely means Scripps wants to be thought of as a possible buyer of portions of Tribune or Cox, both seen as large targets on the market, said Nielson. The Cordillera deal is expected to close in early 2019, Scripps said.