TV Consolidation Will Only Accelerate, Moody's Says

NEW YORK (TheStreet) -- Gannett (GCI), the newspaper publisher shifting its emphasis to television, appears poised to eventually acquire Belo Corp (BLC), the Dallas-based TV-station owner in a deal worth $2.2 billion, even if a few more pennies per share are needed to placate some stockholders.

But looking beyond this deal, local TV-station ownership is headed for further consolidation, says Moody's Investors Service media company analyst Carl Salas. Large and medium-sized television-owner groups, which went on an aggressive buying spree this past summer, are likely to be acquired by even larger entities as the industry's holdings become further concentrated.

That means that TV-station owners such as LIN Media (TVL), Nexstar Broadcasting Group (NXST) and Media General (MEG) could be acquired by media corporations such as Tribune (TRBAA), Gannett (GCI) and Sinclair Broadcast Group (SBGI), Salas said.

Nexstar made itself even more attractive to a larger buyer on Monday announcing the acquisition of five TV stations including two ABC and one CBS (CBS) affiliate in the politically-active state of Iowa at a cost of $103.25 million.

"We've gotten to the point where the M&A activity has really accelerated," Salas said in a phone interview. "As we get to the next stage of consolidation, some of the companies we've looked at as buyers in the past, will now be acquired."

Belo was jumping 1% to $14.04 on Tuesday, trading at a 29-cent premium to Gannett's offer price of $13.75, an indication that pressure may be growing on the publisher of USAToday to increase its offer. Belo shares have reached as high as $14.51 since the deal was announced on June 13.

If you liked this article you might like

Gannett's Offer for Tribune Comes at Critical Juncture for Both Companies

The Deal: Shutdown, FCC Confirmations Could Stall Belo Deal

Ex-Dividends To Watch: 5 Stocks Going Ex-Dividend Tomorrow: NRT, JNY, BLC, RDS.B, CF

Belo Gains in Final Earnings Before Gannet Acquisition