Cox Enterprises on Friday announced a deal to sell a majority stake in its portfolio of 14 television stations, including WSB-TV/Channel 2 Action News, to an international investment firm. The TV properties will become part of a new media company headquartered in Atlanta.
Investment funds affiliated with Apollo Global Management will hold the controlling interest in the Cox Media Group television properties, as well as Cox’s newspapers and radio stations in Ohio. Cox, a privately held broadband, automotive services and media company based in Sandy Springs, will remain a minority owner of the new company.
Financial terms of the deal were not disclosed. The agreement is subject to regulatory approval, which could take about six months.
Apollo plans to combine the Cox stations with future media purchases to help create a national broadcast television giant, and will lean on Cox Media Group’s leadership team to run the new company.
In July, Cox said it would explore strategic options for its television properties, and at the time said that could include partnering or merging its stations into a larger company.
The regional television industry has seen a wave of consolidation, with stations competing with streaming services for viewers. Much like the newspaper and radio industries, the broadcast TV business also has battled a shift in advertising dollars to internet rivals, including Google and Facebook.
But fees stations collect from cable operators remain potent sources of revenue.
Cox’s stations are among the best-performing in the industry. TV operators, clamoring for scale amid expected changes in regulatory conditions, coveted the Cox portfolio. Some 11 bidders, which Cox declined to name, expressed interest in the stations.
“These stations have decades of experience breaking barriers and delivering the news and information their communities need daily,” Alex Taylor, president and CEO of Cox Enterprises, said in a news release. “We wanted to find a company that is committed to investing in broadcast television now and in the future, and we found that in Apollo.”
Apollo is an international investment company and managed about $280 billion in assets at the end of 2018. The company’s business lines include private equity, real estate and credit, and the business has subsidiaries in chemicals, retail, financial services, hospitality and media.
Apollo is a new entrant into the local broadcast television business. A recent Reuters report said Apollo is bidding for some stations from Nexstar Media Group and has an agreement to purchase stations from Northwest Broadcasting, an operator of local TV stations in the Pacific Northwest region.
Cox owns or has interest in stations in some of the nation’s top local television markets, including in Seattle, Boston, Charlotte, Orlando, Pittsburgh, Memphis, Jacksonville, Tulsa and Dayton, Ohio. The stations, which include WSOC-TV in Charlotte, WPXI-TV in Pittsburgh and KIRO-TV in Seattle, reach more than 31 million viewers nationwide.
Cox Media Group retains its ownership of The Atlanta Journal-Constitution, WSB radio, several other Atlanta radio stations and media properties in other markets. The operations of the AJC and the Atlanta radio properties will be unaffected by this deal.
Cox, in its strategic review, sought to find a partner interested in building a broadcast television company committed to growing scale to better compete nationally and to uphold its journalistic standards, the company has said.
“We are extremely excited for our funds to acquire a majority interest in Cox Media Group’s broadcast television stations and are humbled by Cox Enterprises’ decision to entrust us to steward these stations and carry on the Cox legacy,” David Sambur, Senior Partner at Apollo, said in the release. “We have an extraordinary amount of respect and admiration for the journalistic integrity, news quality, and commitment to community across Cox Media Group’s broadcast stations. “We look forward, in collaboration with Cox Enterprises, to supporting the high standards to which each station operates and contributing to the platform’s future growth and prosperity.”
As part of the transaction, Apollo will assume a majority stake in the Dayton Daily News, Springfield News-Sun and Journal-News newspapers, as well as three radio stations in Dayton. The Daily News is where Cox Enterprises traces its founding.
James M. Cox acquired the Dayton Evening News in 1898, later changing its name to the Daily News. The company eventually grew into one of the nation’s largest privately held companies.
The newspapers, radio stations and WHIO-TV in Dayton share a unique business model that involve full integration of their operations.
Apollo plans to maintain the Cox Media management and operating structure within the new company, which has yet to be named.
New media company
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