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Gray Buying KDLT Sioux Falls For $32.5M

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mvcg66b3r

Star Participant
Gray Television on Tuesday agreed to purchase NBC affiliate KDLT Sioux Falls, S.D. (DMA 110) from Red River Broadcasting Co. for $32.5 million in cash. The deal gives Gray a duopoly since it already owns KSFY, the market’s ABC and CW affiliate.

Gray said this transaction “continues Gray’s investment in South Dakota. In the fall of 2016, KSFY-TV moved into a new, technologically advanced facility in downtown Sioux Falls that includes additional space to operate a second television station’s local news and sales operations. This spring, Gray inaugurated a remodeled and expanded building at the foot of the Black Hills in Rapid City to bring new state of the art technology to its ABC and Fox affiliates in that market, KOTA-TV and KEVN-LP.”

The acquisition of KDLT is subject to FCC and other approvals. Gray said it anticipates that the acquisition will be immediately free cash flow accretive and will close in the second or third quarter of 2018. Gray plans to finance the transaction with cash on hand.
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http://www.tvnewscheck.com/mobile/index/article/id/113255
 
Gray trying to convince the FCC to allow them to own 2 full powered stations...per northpine

Two weeks after announcing plans to create an ABC-NBC duopoly in Sioux Falls, Gray TV has submitted documentation to the FCC explaining why it believes the number 2 and 3 stations in the market should be allowed to merge under one roof. FCC rules ban co-ownership of two top-four stations, but a recent rule change will allow waivers to be issued in some cases. This is the first such waiver sought in the Upper Midwest.

Gray owns ABC affiliate KSFY/13.1 and is seeking to buy NBC affiliate KDLT-TV/46.1 from Red River Broadcast Corp. The $32.5 million deal also includes KDLT satellite KDLV/5.1 (Mitchell) and a network of translators. Unlike "virtual duopolies" using shared service agreements or subchannel/low-power TV combinations, which have become commonplace in small markets over the past decade, this deal would result in full ownership of two full-power, core-city licenses.

Gray argues that Nexstar CBS affiliate KELO-TV has long dominated ratings and revenue in the market and that there is a "dire need for an effective competitor." Though exact figures are redacted from the multiple ownership showing submitted for public inspection, Gray says KELO has been the top-ranked news station for the entire history of Sioux Falls TV and has the market's largest news staff. In terms of revenue, Gray's filing says KELO's market share has never fallen below 56.6 percent in the past five years, while the combined share of KDLT and KSFY never exceeded 35.7 percent over that period. (Locally-owned FOX affiliate KTTW, which does not have a news department, accounts for less than 10 percent of the market's revenue.)

Gray's filing also says it is considering the creation of a state capitol news bureau to serve its stations in Sioux Falls and Rapid City, upgrades KSFY's weather computer system and other equipment, and expanding coverage of local sports and events. It says it may add NBC to existing KSFY satellite KPRY (Pierre) and ABC to KDLV and the existing KDLT translators. The latter move would restore ABC broadcast coverage of northeastern South Dakota, which was lost when Gray returned the license of KABY/9 (Aberdeen).

The asset purchase agreement says KDLT's existing studio and a tower or towers are excluded from the deal, but it's not clear if that includes the station's main transmission tower since the section detailing excluded towers was omitted from the filing. Gray's earlier news release mentioned plans to move KDLT into KSFY's new facility.
 
I wonder if Gray will do what they did in Fargo with KVLY and KXJB. I could see that happening adding ABC/NBC on DT2 depending on area
 
bm10k said:
I wonder if Gray will do what they did in Fargo with KVLY and KXJB. I could see that happening adding ABC/NBC on DT2 depending on area
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If the FCC says no to what Gray wants to do which is own both as full power stations. If not I mentioned another thought elsewhere when it first came up
" I wonder if Gray will just swap CW & NBC? Meaning put NBC as a sub on KSFY and move CW over to KDLT which I assume would appease the FCC on the "cant own 2 of the top 4". Also I assume the translators are involved too? If so then maybe they could put ABC on the KDLT translator in Aberdeen??"
 
There's a lot of wide open space in the Dakotas, so I am always in favor of moves that increase the reach of networks. Putting ABC on KDLT and it satellites and putting NBC on KPRY would be good for all over the air viewers in those areas. Similar to how in North Dakota, FOX became a subchannel of the NBC affiliates, greatly increasing its over the air reach. Lots of cord cutting going on, being able to provide those people with as many networks as possible I think is a worthwhile goal.
 
https://tvnewscheck.com/article/top-news/gray-sioux-falls-purchase-challenged/

An Update on Gray

In a potentially precedent-setting proceeding, the American Television Alliance is challenging Gray Television’s request at the FCC for permission to own two top four-rated stations in Sioux Falls, S.D. (DMA 110), citing concerns that the combination would inflate retransmission consent fees and lead to higher cable and satellite prices for consumers.

The challenged was triggered by Gray’s seeking approval for its $32 million purchase of NBC affiliate KDLT in Sioux Falls, a market where it already owns ABC affiliate KSFY.
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https://tvnewscheck.com/article/top-news/236718/kdlt-says-doj-has-okd-sale-to-gray/

An Update

The general manager of KDLT Sioux Falls, S.D. (DMA 115), has alerted her staff that the Department of Justice has cleared the sale of the NBC affiliate to Gray Television, according to a copy of the email obtained by TVNewsCheck.

“Earlier this morning, the DOJ dropped its investigation into the merger of KDLT/KSFY,” GM Katie Haffeman says in the email. “The acquisition now resides with the FCC….”




In the spring on 2018, Gray agreed to buy NBC affiliate KDLT from Red River Broadcasting for $32 million with the intention of merging it with its ABC affiliate in the market, KSFY.

The deal has been hung up at the Justice for more than a year because it involves the combination of top four-rated stations, and antitrust officials are concerned about how such combos may impact advertisers.
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https://tvnewscheck.com/article/top-news/239374/fcc-approves-kdlt-purchase-by-gray/

Update

It took 16 months, but on Tuesday the FCC finally approved Gray Television’s purchase of Red River Broadcast’s NBC affiliate KDLT Sioux Falls, S.D., for $32.5 million, even though it already has another network affiliate, ABC affiliate KSFY, in the market.

The action, in essence, constitutes a waiver of the FCC’s local ownership rules barring ownership of two stations in small markets and of two top-rated stations (typically network affiliates) in all markets.


The FCC was undeterred by Monday’s decision by the U.S. Court of Appeal in Philadelphia that vacated the FCC’s 2017 order relaxing the local ownership rules. Broadcasters, the agency said, could own two stations in any market and the FCC would consider approving top-four combos on a case-by-case basis.

In the Sioux Falls order, the FCC noted that the court’s “mandate” in the case has not yet been issued so that the FCC’s order relaxing the rule is still in effect. “Furthermore, the commission intends to seek review of that decision,” the FCC said.
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northpine has a great write up
http://www.northpine.com/blog/2019/...duopoly-in-sioux-falls-first-case-nationally/

Gray adding a bunch of newscasts to both stations and will bring ABC back OTA to areas that lost it when KABY tower went down

Gray has committed to adding 28 hours of additional news programming on the two stations, though filings have not indicated whether there would be a net gain or loss of TV news jobs in the market as a result of KDLT’s move into the KSFY building. A document submitted as part of the application last December listed the newscast additions and changes as follows:

A 7 to 9 a.m. weekday newscast on KSFY’s CW subchannel
An hourlong news and talk show on KSFY at 9 a.m. weekdays
A half-hour newscast on KDLT at 11 a.m. weekdays
An hourlong newscast on KDLT at 4 p.m. weekdays
KDLT’s current 5 p.m. and 6 p.m. weeknight newscasts would move to 5:30 and 6:30, removing them from competition with KSFY.
A half-hour newscast on KSFY’s CW subchannel at 9 p.m. seven days a week
Weekend morning newscasts on KSFY.
All of the new newscasts will be in timeslots that don’t currently have local newscasts (the market’s FOX affiliate doesn’t have a news department). Gray’s document says the additional newscasts will allow it to “flood the market with an additional 285 new advertising spots per week.”

Meanwhile, the document indicates that KDLT’s NBC channel will be added to a subchannel of KSFY satellite KPRY (Pierre), and KSFY’s ABC channel will be added into KDLT’s transmitter network. The deal includes KDLT satellite KDLV (Mitchell) and six translators, many serving areas that lost ABC when Gray returned the license of KABY/9 (Aberdeen).
 
https://www.argusleader.com/story/n...n-stations-become-dakota-news-now/2843028001/

Here is a new one

Get ready for a seismic shift in the Sioux Falls television news landscape.

Next week, KSFY News will be no more. KDLT News will be no more.

Dakota News Now is set to go live Monday as two of the city's largest network affiliates join forces under one brand, a model of TV news that will test new regulatory waters recently approved by the Federal Communications Commission.

Broadcasts will use a new team of anchors and reporters selected from both stations and assigned by management as part of a staff restructuring. The result will be a block of local news, broadcast throughout the evening and alternating between both channels.

“We have two terrific news teams,” said Jim Berman, president and general manager for KSFY-TV. “The thinking was, 'Let’s merge them together and create a super team.'”
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