Cincinnati's E.W. Scripps is buying ION Media, the national network originally called PAX TV, which distributes programming on its 71 stations in 62 markets, and on 124 affiliated TV stations, reaching 96% of all U.S. homes.
Scripps will pay $2.65 billion for ION Media, based in West Palm Beach, Fla. Warren Buffett's Berkshire Hathaway will make a $600 million preferred equity investment in Scripps to finance the transaction announced this morning, Scripps says.
Scripps will create "a national television networks business" by combining ION with its Katz Networks (Court TV, Bounce, Laff, Grit) and Newsy news network. ION reaches more than 100 million homes through over-the-air and pay TV platforms, and has the "fifth-largest average primetime audience among all cable-carried networks," the media release says.
Scripps, which operates 60 television stations in 42 markets, will sell 23 ION stations to comply with Federal Communications Commission regulations. Scripps has agreed to a transaction with a buyer, who has agreed to maintain ION affiliations with the stations, says Kari Wetherington, Scripps' senior director for external communications.
ION is being purchased from Black Diamond Capital Management, which had acquired a stake in the company in 2009. Pending FCC approval, the deal is expected to close before April next year, Scripps said. ION has 425 employees.
Today ION airs mostly repeats of NBC and CBS crime and justice dramas: Law & Order, Law & Order: Criminal Intent, Law & Order: SVU, Chicago P.D., NCIS; Los Angeles, Criminal Minds and Blue Bloods.
"Combining ION with Katz and Newsy, which also primarily earn revenue from national advertising, will increase Scripps’ reach into this durable ad market as it offers advertisers a larger platform on which to reach their audiences. Together, ION, Katz and Newsy, Scripps’ new national networks business, will reach nearly every American through free over-the-air broadcast, cable/satellite, over-the-top and digital distribution, with multiple advertising-supported programming streams," Scripps says.
This will be the biggest prescence on the national TV landscape since the Cincinnati media company, founded in 1878, split off its popular HGTV, Food Network and Travel Channel cable division as Scripps Network Interactive in 2008. (That company was bought by Discovery Communications in 2018.)
ION was founded as Paxson Communications by Florida businessman Lowell "Bud" Paxson, who sold his radio group and major network affiliates in 1998 to concentrate on building the independent PAX TV network through UHF stations.
The network has never been known for producing its own content. PAX TV launched in 1998 with off-network reruns of Touched By An Angel, Highway To Heaven, Here's Lucy, The Hogan Family and Dr. Quinn, Medicine Woman. The network changed its name to ION in 2006 after Paxson left the company when NBC acquired 32% of it.
"This evolution of Scripps’ national television networks business, through the combination of ION, the Katz networks and Newsy, repositions the company in the television landscape," said Adam Symson, Scripps president and CEO, in the media release. "With its strong revenue growth, high margins and significant cash flow, ION will make Scripps a more powerful and durable media business with significant near-term benefit as well as long-term value. ION Media is a distribution double threat – carried on cable and satellite through must carry (agreements) while also capitalizing on cord-cutting and the growth of free over-the-air broadcasting. This transaction is another in a long list of Scripps' transformative moves to where we see opportunity for growth and to benefit from the evolving media landscape.
"For more than 70 years, Scripps has been dedicated to local broadcasting and the markets we serve with an unparalleled commitment to quality objective journalism, community service and stewardship of the public’s airwaves," Symson said. "Now, with this national broadcasting acquisition, Scripps will be the largest holder of broadcast spectrum, poised to take an even greater leadership role in the development of future business models… to benefit the American people."