Gray Looking to Buy More Stations

Atlanta-based Gray Media is expanding its U.S. television presence by acquiring stations in at least five new markets through deals with SagamoreHill Broadcasting, Block Communications, and Allen Media Group. The deal with Block is valued at $80 million and the Allen Media deal at $171 million. Gray also recently arranged a station swap with the E.W. Scripps Company.

If approved by regulators, the transactions will create 11 new "top-four duopolies" for Gray. A duopoly is when one company owns two of the four highest-rated stations in a single market, allowing it to capture a larger audience share and ad revenue. This structure also allows for significant cost-cutting by sharing resources, which can include consolidating newsrooms and reducing staff.

These acquisitions are occurring in a changing regulatory landscape. In July, a federal appeals court struck down the FCC’s “top-four rule,” which prohibited companies from owning more than two of the top four stations in a local market. The court gave the agency 90 days to respond before the rule is lifted, prompting station owners to pursue acquisitions in anticipation of deregulation.

This consolidation trend is industry-wide. Sinclair has announced a strategic review that could lead to a merger, and Nexstar Media Group is reportedly in talks to acquire Tegna.

Separately, Gray announced its flagship Atlanta station, WANF, will end its long-term affiliation with CBS to operate as an independent station. Company executives state they are focused on executing the announced transactions and have not ruled out a future acquisition of Atlanta's top-rated station, WSB-TV, which would create a duopoly in Gray's home market.