CBS Agrees to Buy Two TV Stations, Two Radio Stations and Cable Channel
MINNEAPOLIS (AP) _ CBS Inc. said Tuesday it had agreed to buy two television stations in Minnesota and Wisconsin, two radio stations and a regional cable television channel in a deal worth about $200 million.
The company said it would buy substantially all of the assets of Midwest Communications Inc. for a combination of $50 million in CBS stock and the assumption of about $150 million of Midwest debt.
The acquisition has long been rumored and boosts CBS’ holdings to seven TV stations and 21 radio stations.
The cable TV channel give CBS a presence in the cable TV business, which CBS Chairman Laurence A. Tisch had previously shunned even as the owners of the other two big broadcast networks plunged into cable.
Included in the deal are WCCO-TV in Minneapolis and WFRV-TV in Green Bay, Wis. and radio stations WCCO-AM and WLTE-FM in Minneapolis.
It would also include Midwest Sports Channel, a regional sports cable channel.
″The purchase of these splendid properties underscores CBS’s continuing commitment to free over-the-air broadcasting, and strengthens the competitive capacity of both our television stations and radio divisions in the media marketplace,″ Howard Stringer, president of the CBS Broadcast Group, said in a news release.
Midwest Communications had put itself up for sale 2 1/2 years ago, but the board pulled the properties off the market when it decided bids were too low. At that time, the asking price was an estimated $350 million to $400 million.
Analysts had expected the assets would now fetch about $200 million because of a faltering advertising economy and changing viewing habits that eroded the audience for broadcast properties.
The sale, subject to the approval of Midwest Communications stockholders, the Federal Communications Commission and the Securities and Exchange Commission, is expected to be completed by the end of the year.
Joseph E. Murphy Jr., chairman of the Midwest board said he and James Rupp, president and chief executive officer of Midwest Communications, will no longer be associated with the company once the transaction is finalized because their jobs are duplicated by network officials.
Murphy told a news conference that negotiations began with CBS last December and company officials signed the purchase agreement with the network Tuesday morning.
He predicted that the more than 170 shareholders will overwhelmingly approve the transaction.
″I’m a little bit sad that the family will no longer be in the communications business,″ Murphy said. His family’s roots in the news business go back to 1891 when W.J. Murphy, uncle and great uncle of the present Murphy family stockholders, became the publisher of the Minneapolis Tribune.
CBS’s other owned and operated television stations are in New York, Philadelphia, Chicago, Miami and Los Angeles.
CBS said the acquisition of the Minneapolis and Green Bay TV stations would give the network 22.7 percent of the national television audience. The FCC limits networks to owning a maximum of 12 stations reaching 25 percent of the nation.
CBS currently owns 19 radio stations, seven AM stations and 12 FM operations. The company said it will file a request for a waiver of the FCC ownership rule that prohibits common ownership of radio and television stations in the same market.
In addition, CBS said it will also seek a waiver of the FCC rules that limits ownership of FM stations to 12.
WCCO-AM was owned by CBS from 1931 to 1952. The network also owned a 47 percent non-voting interest in the same station and WCCO-TV from 1952 to 1954.