Scripps announces $2.65BN ION Media acquisition | Major Businesses | Business
By continuing to use this site you consent to the use of cookies on your device as described in our privacy policy unless you have disabled them. You can change your cookie settings at any time but parts of our site will not function correctly without them. [Close]
In a move that the broadcast giant says will create a full-scale television networks business across the US, the E.W. Scripps Company is to buy US broadcast network ION Media for $2.65 billion, combining the business with Scripps’ Katz networks and Newsy.
ION LOGO black 24Sep2020
Based in West Palm Beach, Florida, ION Media operates a national television network featuring popular crime and justice procedural programming. The network boasts the fifth-largest average primetime audience among all cable-carried networks in the US and generates from national marketplace advertising. ION owns in 62 markets and 124 affiliated TV stations, reaching 96% of US homes and reaches more than 100 million homes through over-the-air and pay-TV platforms and claims to have consistently achieved annual revenue growth and EBITDA margins “well beyond” industry averages.

Scripps calls the acquisition of the firm highly accretive, calculating that it will yield $500 million in synergies, most of which are contractually based, over the next six years. It adds that the combination of ION, Katz and Newsy is expected to produce run-rate synergies that reach as much as $120 million a year, a majority of which will be carriage fee savings associated with the Katz networks. In addition it says that combining ION with Katz and Newsy, which also primarily earn revenue from national advertising, will increase Scripps’ reach into a durable ad market as it offers advertisers a larger platform on which to reach their audiences.

Moreover Scripps says that its new national networks business will reach nearly every American through free over-the-air broadcast, cable/satellite, over-the-top and digital distribution, with multiple advertising-supported programming streams.

US multinational conglomerate Berkshire Hathaway will make a $600 million preferred equity investment in Scripps to finance the transaction. It will also receive a warrant to purchase up to 23.1 million Class A shares, at an exercise price of $13 per share.

“This evolution of Scripps’ national television networks business, through the combination of ION, the Katz networks and Newsy, repositions the company in the television landscape,” said Scripps president and CEO Adam Symson commenting on the deal. “With its strong revenue growth, high margins and significant cash flow, ION will make Scripps a more powerful and durable media business with significant near-term benefit as well as long-term value. ION Media is a distribution double threat – carried on cable and satellite through must carry while also capitalising on cord-cutting and the growth of free over-the-air broadcasting.”