Broadcast TV stations are appealing to private equity because of the cash-rich fees they generate from being carried by cable operators.
According to sources familiar with the matter at hand, Apollo Global Management LLC is close to sealing a nearly $3 billion deal to acquire Cox Enterprises Inc’s 14 regional TV stations.
The development assumes significance since the potential deal is a vehicle for private equity firm Apollo Global Management LLC to become a player in the U.S. broadcasting market, said sources familiar with the matter at hand.
Cox Enterprises Inc, a privately held media conglomerate whose holdings range from cable TV, automotive websites, to newspapers, is looking to exit the regional TV sector which is in the midst of a wave of consolidation.
Players in this sector are looking to scale up to counter the rise of online streaming media and the shift of advertising dollars to the internet. Cox and Apollo are also discussing some joint venture agreements for Cox’s broadcast station in Atlanta, where Cox is headquartered and also has radio stations, said sources who went on to add, both companies may decide to have joint ventures in other cities as well.
Given that negotiations are at an advanced state, an agreement between the two could be announced as soon as this week, said sources on the condition of anonymity since the discussions are private and confidential.
As with any negotiations, talks could always fall apart at the last minute, said sources.
Incidentally, Apollo is also a bidder for a portfolio of local TV stations worth about $1 billion that Nexstar Media Group Inc plans to divest following its $4.1 billion takeover of Tribune Media Co, said sources. This process is on track to be completed in the first quarter of this year. Should Apollo prevail in that auction, it would combine the assets with the Cox TV stations, said sources.
Incidentally, Apollo already has an agreement to acquire Northwest Broadcasting’s assets, which owns more than a dozen TV stations in mostly rural markets in the Pacific Northwest. Apollo is likely to merge those with Cox’s assets, said sources.
Both Cox and Apollo declined to comment.
Northwest Broadcasting and Nexstar could not be reached for comment.