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WJLA and NewsChannel 8 up for sale

Washington TV station WJLA, the crown jewel in the late Joe L. Allbritton’s television empire, is for sale, Allbritton’s son and heir announced Wednesday.

The station, as well as the NewsChannel 8 cable operation in the Washington area, would be sold along with seven other stations across the country that are the heart of privately held Allbritton Communications of Arlington, the company’s chief executive, Robert Allbritton, said in a memo to his staff.

The sale won’t affect Politico, the Web site and newspaper founded by the younger Allbritton in 2007, though the cash generated by it could help expand the 250-employee operation and lead to new ventures that build on Politico’s success.

Like other TV station owners, the Allbritton group is operating in a difficult environment. Local stations have lost viewers for years as the number of alternatives, from cable to satellite to the Internet, have grown. At the same time, the recession has taken a deep bite out of advertising revenue. The most alarming movement of viewers has been away from local TV newscasts, which can generate more than a third of a station’s revenues.

The Allbritton TV group generated $214 million in revenue last year and $28.9 million in profit, according to its annual report. Both figures were a big boost from a year earlier, but the gains came mostly from WJLA and two smaller stations — WSET in Roanoke and WHTM in Harrisburg, Pa. — that reaped a bounty from an influx of political ads.

WJLA (Channel 7) and NewsChannel 8 accounted for about half of the group’s revenue over the past three years, according to the annual report.

A sale of the group could generate $300 million or more, estimated Christopher Miller, president of Gammon Miller, a Midwest-based media investment banking brokerage firm. “They are a very well run, highly-respected broadcast company,” he said.

Added Miller: This is a great time to bring another television station group to market. There’s lots of interest in acquiring television stations.”

Although the Allbritton group’s fortunes were strong last year, it has had several up and down years, reflecting the shifting fortunes of the television business and larger national economy. It lost $5.6 million in 2009, for example, as the recession settled in, but it has rebounded since then.

However, Allbritton and other TV-station operators are fighting strong head winds. The stations’ 2012 revenue was below their 2006 level ($216 million) and reflected only a small increase, after inflation, from the previous major election year, 2008 ($205 million).

Meanwhile, the group is carrying a debt load of $455 million, or more than twice its annual revenue last year.

In his memo, Allbritton, 44, signaled that he saw a rosy future on the Internet. “This is the Golden Age of new media innovation, and I intend to stay on the leading edge of it,” he said in an e-mail to the staff. “So, I will be looking to invest in or launch media companies that follow the Politico model of dominating targeted coverage — and then using multiple revenue streams to profitably fund it. I see a very bright future for media companies like this and plan to show this with substantial investment in coming months and years.”

He did not disclose plans for new ventures.

Joe Allbritton, who died last year, bought the Washington station in 1974, as part of his acquisition of the Washington Star newspaper. He was forced to divest the Star under federal cross-ownership rules but kept the station, which he renamed using his initials. NewsChannel 8 was started in 1991.

 Attribution: - By Paul Farhi, Wednesday, May 1, 12:06 PM

Full article: WJLA and NewsChannel 8 up for sale

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