NEW YORK (The Deal) -- Since late 2013, Atlanta broadcaster Gray Television (GTN) has acquired more than two dozen TV stations throughout the U.S. Often, the targets have been small operators with the leading stations in places like Cedar Rapids, Iowa, or Odessa-Midland, Texas, which face an increasingly challenging marketplace.
"It's incredibly difficult to maintain a single TV station at the top of its game in this environment," said Gray's senior vice president of business affairs, Kevin Latek, who handles the company's M&A work and serves as general counsel, among other roles.
In addition to competition from Internet video, TV stations have to negotiate deals with cable operators that have become larger through consolidation and with the networks that provide programming.
"The negotiations in every direction require more scale," Latek said.
Gray generally targets the first- or second-leading station in small and midsized markets.
The company broadcasts in 47 markets. Knoxville, Tenn., the 61st-largest U.S. TV market, is Gray's biggest territory. The company has stations in about a dozen of the top 100 markets, but most of its properties are in smaller towns.
The most recent deal is the $100 million purchase of KCRG-TV, which is an affiliate of Walt Disney's (DIS) ABC network and is the top station in Cedar Rapids. The seller is Gazette Co., which publishes the Cedar Rapids Gazette. "They put that station on the air in the 1950s," Latek said. Tucson, Ariz., broadcasting boutique Kalil & Co. advised Gray on the purchase.