Gray TV said it has completed its $3.6 billion purchase of Raycom Media, creating a new station group powerhouse with TV properties in 91 markets across the country.

Gray agreed to purchase Raycom in June, in a deal they said would create the largest owner of top-rated TV stations in the country. According to Gray, it now owns the first or second highest rated TV station in 85 markets, according to Comscore’s audience measurement data between December 2017 and November 2018.

In total, Gray owns and/or operates television stations and digital properties in 91 markets across the country, including 150 affiliates of the Big 4 networks.

Back in June, Gray said it would divest of nine TV stations in overlap markets in Knoxville, Tenn.; Waco, Texas; Albany, Ga.; Toledo, Ohio; Tallahassee, Fla.; Augusta, Ga.; Panama City. Fla.; and Dothan, Ga. to comply with Federal Communications Commission local ownership rules. Those stations were sold to Tegna, Scripps and Lockwood Broadcasting.

After the close Gray chairman and CEO Hilton Howell became the combined company’s executive chairman and CEO, and former Raycom president and CEO Pat LaPlatney became Gray’s president and co-CEO. Former Raycom president and CEO Paul McTear, joined Gray’s Board of Directors. Gray’s chief operating officer, Local Media Bob Smith will continue to oversee station operations and Jim Ryan will continue his role as chief financial officer

Nick Waller continues as chief administrative officer and former Gray general counsel Rob Folliard becomes vice president, Government Relations and Distribution. In other management news, Greg McCastle serves as SVP, Sales Strategy and Development; and former Raycom executive Dave Burke is Gray’s new SVP and Chief Technology Officer. Dianne Wilson, also formerly of Raycom, is Gray’s new Vice President, Employee Relations, and will work closely with Jan Goldstein who continues as Gray’s Vice President, Human Resources. Greg Conklin continues in his role as Gray’s Vice President, Programming.

Also at closing, Gray promoted Mike Braun to SVP, Gray Digital Media; Becky Meyer to SVP, National Sales; Mike Jones to VP, Political Sales; and Karen Youger to VP, Sales Operations, overseeing Traffic, the Programming Hub, and Matrix.

Gray Television has agreed to buy Raycom Media for $3.6 billion, a move they say will create the single largest owner of top-rated TV stations in the country.

Gray, based in Atlanta, currently owns or operates about 100 stations in 57 markets, while Raycom owns or provides services for 65 stations in 44 markets. The cash and stock deal, expected to close in the fourth quarter of this year, will create a 142-station powerhouse in 92 separate markets, reaching 24% of the TV homes in the U.S. 

According to Gray TV, the combined company would have 62 stations that are ranked No. 1 in all-day ratings in their respective markets, according to Nielsen, the largest concentration of top-rated stations owned by any single broadcaster.

Gray TV shares surged on the NASDAQ Exchange after the deal was announced, up 15% ($1.95 per share) to $14.75 each in early trading Monday. 

To facilitate regulatory approval of the deal, Gray has agreed to divest stations in nine overlap markets – Knoxville, Tenn.; Waco, Texas; Albany, Ga.; Toledo, Ohio; Tallahassee, Fla.; Augusta, Ga.; Panama City. Fla.; and Dothan, Ga. Wells Fargo, which is underwriting a portion of the Raycom deal, will immediately begin to market those stations to third parties.

The deal comes on the heels of another mega-broadcast deal – Sinclair Broadcast Group’s pending $3.9 billion purchase of Tribune Media, which is currently winding through the regulatory approval process. 

Related: Sinclair Inks Deal to Buy Tribune for $3.9B 

In addition to stations, Gray also will receive Raycom Sports, a marketing, production and events management and distribution company; Tupelo Raycom, a sports and entertainment production company; RTM Productions, an automotive programming production and marketing solutions company; and Broadview Media, a post-production/digital signage company.

Raycom president and CEO, Pat LaPlatney, will become Gray's president and co-CEO, after the deal is completed, expected in about . LaPlatney and Raycom's former CEO, Paul McTear, both of whom are currently members of Raycom's board of directors, will join the new company ‘s board of directors. At that time, Gray chairman Hilton Howell will become executive chairman and co-CEO of the new entity.

"Combining our company with the excellent Raycom stations and the superb Raycom employees will create a powerhouse local media operation,” Howell said in a statement. “Together, this new portfolio of leading local media outlets will excel at what they do best, which is to provide the local news that local communities trust, the entertainment and sports content that viewers crave, and the incredible reach that advertisers demand. Indeed, this is a transaction in which there can be no doubt that local community standards will be honored and embraced."

Wells Fargo Securities, LLC served as financial advisor and Cooley LLP and Jones Day served as legal counsel for Gray. Stonebridge Capital served as financial advisor and Robinson Bradshaw and Covington & Burling served as legal counsel for Raycom.

"Together, we will be a stronger, more impactful force for our audiences, advertisers, and communities,” LaPlatney said in a statement. “I have tremendous respect for the way Hilton Howell and Gray Television have grown their portfolio with a focus on localism. I look forward to working alongside Hilton and the wonderfully talented people of Gray Television as the combined entities create an even greater opportunity for growth as a leader in the broadcast industry.”

Perhaps in response to DirecTV’s comment that broadcast station groups “ransom” their content during retransmission consent battles, Raycom Media returned the favor, pointing out that the nation’s largest satellite TV service provider is hardly in a positon to cry poverty.

Raycom Media and DirecTV reached an agreement in principle on Sept. 7 regarding the broadcaster’s 43 stations in 37 markets mostly in the south. The deal was made after Raycom pulled its signals for the stations on Sept. 1.  In announcing the deal DirecTV thanked its customers for their patience, but added that “Raycom’s intentional recent blackouts of Dish, Cox and now DirecTV customers creates an even greater sense of urgency for lawmakers to  review and overhaul tis anti-consumer retransmission consent process once and for all.”

Raycom apparently took exception to that characterization and in a “fact sheet” sent via the National Association of Broadcasters Monday, pointed out the following:

• “DirecTV earned $2.3 Billion dollars in 2013, and their profits were up 14%, yet they profess to be ‘fighting to hold costs down for their subscribers.’
• DirecTV has removed stations from its lineup at least 12 times in the last 3 years as a negotiating and political tactic, including another broadcaster, just last week.
• Since our last agreement with DirecTV, Raycom Media has successfully negotiated more than 200 agreements without disruption to our viewers. That's a 99% success rate.
• In the history of our company only 3 providers have removed our stations from their system-DirecTV being one of them.
• Raycom Media looks forward to working with DirecTV to turn our agreement in principle into a final, fully-binding document. We fully support the terms both parties agreed to Sunday and hope DirecTV will too.”