Gannett Acquiring Belo for $2.2 Billion

RELATED: Gannett/Belo:Station Consolidation Nation

Sinclair'sSpree Dazzles Street, Puzzles Stations
TheRise of the Station Super-Groups

Gannett has agreed to
acquire Belo, boosting its broadcast portfolio from 23 to 43 stations. Gannett
will acquire all outstanding shares of Belo for $13.75 per share in cash, or
approximately $1.5 billion, plus the assumption of $715 million in existing debt
for an enterprise value of approximately $2.2 billion.

The deal, subject to regulatory approval, is expected to
close by the end of 2013.

The acquisition nearly doubles Gannett's broadcast portfolio
from 23 to 43 stations, including stations to be serviced by Gannett through
shared services or similar arrangements. Upon completion of the transaction,
Gannett said it will become the No. 1 CBS affiliate group, No. 4 ABC affiliate
group, and will expand its already largest NBC affiliate group position.

"We are thrilled to bring together two highly respected
media companies with rich histories of award-winning journalism, operational
excellence and strong brand leadership," said Gracia Martore, president
and CEO of Gannett. "It will significantly improve our cash flow and
financial strength, enabling us to quickly pay down debt while remaining
committed to disciplined capital allocation. By enhancing our portfolio with
one of the largest, most geographically diverse and network-balanced TV station
groups in the country, the new Gannett will be well positioned to lead
innovation, bolster our existing growth initiatives and take advantage of new
opportunities in the emerging digital media landscape."

The transaction, unanimously approved by the boards of
directors of both companies, represents a 28.1% premium to the closing price of
Belo common stock on June 12.

Gannett anticipates that the transaction will generate
approximately $175 million in annual synergies within three years after

In Belo, Gannett gets a group of stations with sterling
reputations for local news and community involvement.

Dunia A. Shive, Belo's president and CEO, called it "an
outstanding and financially compelling transaction" for Belo's shareholders.
"I am confident that we have found an excellent partner in Gannett--they
are a leading media company that shares our commitment to the highest levels of
journalistic integrity and embraces an active approach to community
involvement," she added. "Together, this portfolio of media assets
will be well-positioned to capitalize on substantial growth opportunities in
the years ahead."

The planned acquisition comes on the heels of apending merger between Media General and Young Broadcasting, and several
other examples of extreme consolidation in the local broadcasting business.

The announced deal did not sit well with Free Press, a
veteran critic of media consolidation, which has pushed the FCC to tighten its
ownership rules. 

"We've seen time and again that media
consolidation means fewer journalists and less diversity on the public
airwaves," Free Press president Craig Aaron told B&C. "Broadcasters are on a shopping spree, using cash
from last year's political ad bonanza to buy each other. The day is fast
approaching when a small handful of companies will control all of the
affiliates in major markets and the swing states."

Michael Malone

Michael Malone, senior content producer at B+C/Multichannel News, covers network programming, including entertainment, news and sports on broadcast, cable and streaming; and local broadcast television. He hosts the podcasts Busted Pilot, about what’s new in television, and Series Business, a chat with the creator of a new program, and writes the column “The Watchman.” He joined B+C in 2005. His journalism has also appeared in The New York Times, The Philadelphia Inquirer, Playboy and New York magazine.