BreakingviewsCapital Calls: Meredith flips the switch on TV

Reuters
2 minute read

Sony's first color TV set KV-1310 is displayed at Sony's history museum in Tokyo February 23, 2012. REUTERS/Kim Kyung-Hoon

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TIME ON ITS HANDS. Meredith (MDP.N) has agreed to sell 17 local U.S. TV stations to Gray Television (GTN.N) for $2.7 billion in cash, about 10 times the assets' adjusted EBITDA. It's a delayed reaction to Meredith's failure more than five years ago to bulk up its TV assets and leaves the company focused on magazines.

In 2015, Meredith had designs on broadcaster Media General. But rival Nexstar Media (NXST.O) swooped in and snatched the target, paying $4.1 billion including debt or about 9 times EBITDA. Meredith ultimately bought magazine publisher Time Inc instead, including titles like People. It may not have been the ideal option: Meredith's shares have slipped by a third over five years, while Nexstar's have nearly tripled.

At least Monday's deal pegs the valuation of Meredith's TV properties at a higher multiple than Media General's back then and brings in some cash. It's a small victory for Meredith boss Tom Harty to savor as he makes the best of what's left. (By Jennifer Saba)

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