The E.W. Scripps Company and Black Diamond Capital Management closed Scripps’ acquisition of ION Media Networks. The transaction was financed with $800 million in term loans, $550 million of secured notes, $500 million of unsecured notes, a $600 million investment from Berkshire Hathaway in preferred stock and cash from the balance sheet. The debt financing was led by Morgan Stanley Senior Funding, with BofA Securities, Truist Securities, J.P. Morgan and Wells Fargo as joint book runners.
Scripps is combining ION with the Katz networks and Newsy to create a national television networks business. Together, the national networks will reach viewers through free, over-the-air broadcast, cable/satellite, over-the-top and digital distribution, with multiple advertising-supported programming streams. The new national networks business is being led by Lisa Knutson, president of national networks, who was previously Scripps’ CFO.
“This is a historic and transformational moment for Scripps that strengthens our leadership position in broadcasting and accelerates our multiplatform strategy to serve diverse audiences everywhere they seek to be informed and entertained,” Adam Symson, president and CEO of Scripps, said. “Bringing our networks together with ION will create a formidable national television business focused on connecting with audiences and advertisers in the rapidly evolving media landscape while fueling our company’s future growth.”
With this sale, Black Diamond completed its 11-year turnaround of ION.
“We are extremely proud of ION’s transformation from $33 million of EBITDA in 2009 to $300 million plus during our ownership,” Christopher W. Parker, senior managing director of Black Diamond and an ION director, said. “This sale brings to a conclusion a successful investment for all of ION’s shareholders. We thank ION’s management team and wish Scripps well with its acquisition.”
ION reaches more than 100 million homes through over-the-air and pay TV platforms. The acquisition will yield $500 million in synergies, most of which are contractually based, over the next six years, reaching a $120 million run rate.
Scripps also completed the sale of 23 ION affiliated TV stations to INYO Broadcast Holdings, a Salt Lake City–based operator of stations.
As the nation’s fourth-largest local TV broadcaster, Scripps operates a portfolio of 60 stations in 41 markets.
Methuselah Advisors and Morgan Stanley acted as financial advisors to Scripps and arranged the preferred equity investment by Berkshire Hathaway. Morgan Stanley Senior Funding provided the financing commitments for the secured and unsecured debt. Ernst & Young Capital Advisors served as debt advisor.
BakerHostetler and Brooks Pierce served as Scripps’ legal co-counsel for the acquisition, and Simpson, Thacher & Bartlett and Dickinson Wright served as Scripps’ legal co-counsel for the committed financing. Evercore served as exclusive advisor to the Scripps family and Kirkland & Ellis served as its legal counsel.
Black Diamond was advised by Akin Gump Strauss Hauer & Feld on FCC legal matters. Skadden, Arps, Slate, Meagher & Flom and Cooley served as legal counsel for ION Media.
