ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Tuesday, July 23, 1996 TAG: 9607230082
SECTION: VIRGINIA PAGE: A-1 EDITION: METRO
SOURCE: GREG EDWARDS STAFF WRITER
WSLS (Channel 10) learned Monday that it soon will have its second new owner within a two-year period and become part of what will be one of the most powerful media companies in the Southeast.
Media General of Richmond, whose flagship property is the Richmond Times-Dispatch, announced it will take over Park Acquisitions Inc. of Lexington, Ky., in a cash merger for $710 million.
Park Acquisitions acquired Park Communications Inc., a major media company and the parent of WSLS, in May 1995. Besides WSLS, Park owns nine other television stations, 28 daily newspapers and 82 weekly newspapers.
The merger, which Media General said will be financed through bank loans rather than the sale of stocks or bonds, is expected to close by Jan.1, if government regulators give their approval.
People familiar with the media business say Park's newspapers and television stations should ultimately benefit from Media General's ownership.
"I think that Media General's idea of good journalism is one of the best among newspaper companies," said Hampden Smith, a journalism professor at Washington and Lee University. "I'd like to think that corporate culture and sense of service to the public is something that the newspapers and television stations in Park will be expected to adhere to.
"So, I think the people in the areas to be served by these new Media General operations will be quite pleased by the new owners of their newspapers and television stations."
With Monday's announcement, Media General has made acquisitions within the past 12 months totalling $1 billion, an aggressive departure for a traditionally conservative company.
Last October, Media General subsidiary Virginia Newspapers Inc. bought daily newspapers in Lynchburg, Charlottesville, Culpeper and Suffolk and several weeklies from Worrell Enterprises Inc. of Charlottesville for $230 million.
Last month, the company said it would purchase the Danville Register & Bee, a daily newspaper serving Southside Virginia, for $38 million. The Danville deal should close within a month, said Bob Pendergast, a Media General spokesman.
Media General also owns three television stations. However, WTVR, a CBS affiliate in Richmond that Media General will acquire in the Park deal, as well as a Park station in Utica, N.Y., probably will have to be sold because of Federal Communications Commission regulations prohibiting a company from owning daily newspapers and television stations in the same community.
The acquisition will give Media General access to 22.1 percent of the television homes in the Southeast compared with the 9.2 percent that the company's existing stations reach, the company said.
Media General has become the largest Virginia owner of newspapers, and the Park acquisition will add daily newspapers in Manassas and Waynesboro to its holdings.
"I think we've decided that we want to be a major news and information player in the Southeast - the area we know and like and that has the greatest growth potential," Pendergast said.
The Park deal represented an unusual opportunity for Media General, Pendergast said. A company the size of Park doesn't often come on the market, he said.
It's premature to talk about individual newspapers or television stations, but the company knows it's going to have to invest money in some of the properties it will acquire from Park, Pendergast said.
New investment would come as good news to Bill Foy, news director of WSLS. However, Foy said, Park Acquisitions has made a significant financial commitment to the station in the months it has owned it.
The station is buying a satellite uplink truck, expanding its news bureaus and renovating its Roanoke offices, including building a new newsroom, Foy said. The station has added Doppler weather radar, digital editing equipment, new graphics computers and wireless microphones, he said.
Foy said Randy Smith, the station's general manager, told him following Monday's announcement that its purchase by Media General was one of the most positive things ever to happen to WSLS. Smith was in Lexington at a corporate meeting when the announcement of the sale was made and wasn't available to comment.
WSLS, originally owned by the Shenandoah Life Insurance Co. of Roanoke, signed on the air in December 1952. It was bought by Roy H. Park Broadcasting in 1969 and was sold to Park Acquisitions after Park's death in 1993. The station's coverage area stretches from Grayson County east to Charlotte County and from the North Carolina line to Pocahontas County, W.Va. The station employs more than 70 people.
Park Acquisitions is privately owned by investors Donald Tomlin of Columbia, S.C., and Gary Knapp of Lexington, Ky. Tomlin and Knapp paid $711.4 million for Park Communications. That's more than Media General will pay them, but does not include 22 radio stations they have since sold.
Joseph Antrim III, a securities analyst with Davenport & Co., a Richmond brokerage firm, said Media General paid a fair price for Park. "I don't think they got a steal," he said.
Antrim said the stock market will not react immediately to the news of the acquisition because it won't have that much impact on Media General's earnings this year. The company's stock, trading on the American Stock Exchange, closed at $33.75 Monday afternoon, down $1.621/2 on trading of 49,900 shares.
Media General earned $15.1 million, or 57 cents per share, on revenues of $184.8 million in the first quarter, which ended March 31, the latest available figures. That compares with year-earlier net income of $12.7 million, or 48 cents per share, on revenues of $165.2 million.
Publishing divisions accounted for 52 percent of its revenues in this year's first quarter, while broadcasting contributed 8.7 percent, and cable television and newsprint mills each provided about 19 percent.
Media General Chairman and CEO J. Stewart Bryan III said the acquisition will contribute immediately to his company's cash flow but will dilute its profits initially. Media General showed total debt at the end of its first quarter on March 31 of $299.8 million. Total debt after the acquisition will not exceed four times the company's cash flow, Bryan said.
LENGTH: Long : 111 lines ILLUSTRATION: PHOTO: ALAN SPEARMAN/Staff. WSLS (Channel 10) anchors announcedby CNBon the 5 o'clock news that the station was bought Monday by Media
General. Graphic: Map by staff. color.