When L.A. broadcast company New Vision Television sold 17 TV stations last week, it was evidence of an improving outlook for local TV markets.
The stations, purchased by Lin TV Corp. of Providence, R.I., are in eight midsize markets including Portland, Ore.; Birmingham, Ala.; Honolulu; and Wichita, Kan.; and were sold for $330 million and the assumption of $12 million of debt.
Jason Elkin, New Vision’s chief executive, said his company will use the proceeds to buy stations in bigger markets. The company has been buying and selling groups of stations since 1993.
“New Vision is going to start reacquiring,” Elkin said. “We have a war chest and we want to start buying new stations. We believe in the sector.”
Elkin is looking at stations in markets among the 20 and 50 largest. Those include San Diego; Tampa Bay, Fla.; and Denver. The company buys stations seen as underperforming and invests to improve them, for example, buying HD cameras for local newscasts.
Also, investors keep the company on a time line that dictated it was time to sell the 17 stations.
Lin TV, meanwhile, is using the acquisition to expand its footprint of stations in the western and southern regions. Lin estimates that it will reach almost 11 percent of television households after the deal closes, compared with its current 7 percent.
Pending regulatory approval, the sale is expected to close by the end of the year. The stations in the deal include 13 network affiliates, 10 of which are affiliated with NBC, ABC, CBS or Fox.
The sale comes amid an improving TV ad landscape, as political campaigns heat up and forecasts for Olympics ad sales are optimistic. New York advertising firm MagnaGlobal projected 8.5 percent growth in broadcast TV advertising this year, due largely to the elections and Olympics. Meanwhile, retransmission consent fees, which cable and satellite companies pay local TV stations to broadcast their shows, are on the way up too, said analysts.
Barry Lucas, an analyst at Gabelli & Co. in New York, said consolidating ownership gives station owners more clout in their negotiations to get top dollar for retransmission fees.
“If you’re a bigger guy, you get a bigger seat at the table,” Lucas said.
Movie Properties
The first quarter may have raised the curtain on a strong year for movie theaters, as U.S. movie attendance rebounded from 2011’s 16-year low. Earlier this month, behemoth chains Cinemark Holdings Inc. of Plano, Texas, and Regal Entertainment Group of Knoxville, Tenn., reported earnings that beat Wall Street estimates.
The surge in attendance also helped lesser-known theater owner-operator and real estate company Reading International Inc. of Commerce, which reported last week that revenue increased 16 percent to $62.7 million in the first quarter compared with the same period last year.
Andrzej Matyczynski, Reading’s chief financial officer, attributed the gains to a slate of popular films, including “The Hunger Games.”
“In general we’re pleased with the results,” he said. “We think it’s a sign of what will carry on throughout the year based on the product that will be available.”
The company, which operates regional theater chains such Reading Cinemas in California, Consolidated Theatres in Hawaii and City Cinemas in New York, reported that attendance in its U.S. theaters increased by 518,000 people in the first quarter, compared with the first quarter of last year. Reading also has theaters in New Zealand and Australia, though the company did not break out attendance numbers for those.
Reading reported a loss of $239,000 compared with a $2.5 million loss for the same quarter in 2011. Matyczynski attributed the loss to the company’s real estate business, and the costs of developing properties in New Zealand and Melbourne, Australia, where Reading is planning to build a mixed-use retail center with a theater as the anchor tenant. The company in January also purchased 202 acres zoned for single-family housing in the Coachella Valley through a subsidiary.
“You can’t compare us directly to an AMC or Regal,” he said. “It’s mixture of real estate and cinemas.”
Shares, which trade on NYSE Amex, closed at $5.43 on May 9, up 28 percent for the year.
Greek Credit
The Los Angeles Greek Film Festival, which will kick off later this month, will feature examinations of the country’s ailing economy and other business issues.
The festival will open May 31 at the Egyptian Theatre in Hollywood with the world premiere of “A Green Story,” starring Shannon Elizabeth. It tells the story of a Greek immigrant, given just months to live, who strives to make one last business deal.
“Tungsten,” which will have its L.A. premiere at the festival, tells the story of three men’s converging paths during a single day in crisis-ridden Athens.
The four-day festival is produced by the North Hills non-profit Eastern Mediterranean and Balkan Cultural Center.
Staff reporter Jonathan Polakoff can be reached at [email protected] or at (323) 549-5225, ext. 226.
