Gannett announced that it will acquire all outstanding shares of Belo for roughly $1.5 billion, plus assume $715 million in existing debt, in a $2.2 billion deal that will make Gannett the nation's fourth-largest owner of major network affiliates.
Once the transaction is complete, Gannett will reach nearly a third of all U.S. households. The deal nearly doubles its current broadcast portfolio from 23 to 43 stations, including stations to be serviced by Gannett through shared services or other arrangements. The company will have 21 stations in the top 25 markets and will become the No. 1 CBS affiliate group and the No. 4 ABC affiliate group. It is already the top NBC affiliate group.
The deal has been unanimously approved by the boards of directors of both companies.
"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.
Added Belo president and CEO Dunia A. Shive: "This is an outstanding and financially compelling transaction for our shareholders. It is also a testament to the tremendous value our employees have created over Belo's long history and to the strength of our brand in the media industry."
But Craig Aaron, president and CEO of the consumer group Free Press, said in a tweet that the deal would likely violate the Federal Communications Commission's limits on cross ownership, which is designed to prevent one company or person from owning multiple media outlets in a given market.
"Sure looks to me like part of this Gannett/Belo deal is prohibited under FCC rules. Can't own newspapers and TV in Louisville and Phoenix," he said in the tweet.
He said the FCC has had its "head in the sand" about increasing concentration of ownership that is "failing local communities."
Gannett plans to comply with FCC rules through shared and joint-service agreements. That means it will contract independent third parties to manage stations in markets where its media properties overlap. Those markets include Phoenix, St. Louis, Portland/Salem, Louisville and Tucson.
Ira Teinowitz contributed to this story.