KGMB owner to get $22M from Raycom: Critics say arrangement proves that newsroom merger was actually a sale

Fri. November 06, 2009; Posted: 03:03 PM

Nov 06, 2009 (The Honolulu Advertiser - McClatchy-Tribune Information Services via COMTEX) -- MCGC | Quote | Chart | News | PowerRating -- Raycom Media Inc. is obligated to pay $22 million to the owner of KGMB9 in seven years as part of the newsroom merger between KGMB, KHNL and K5 television stations.

In a filing with the Securities and Exchange Commission Wednesday, Virginia-based MCG Capital Corp said Raycom, which owns K5 and KHNL, also must make quarterly interest payments and annual principal payments.

Critics said the arrangement shows that the merger is in fact a sale and should be overturned under federal laws barring multiple ownership of television stations in a single market.

"This is media consolidation at its worst," said Chris Conybeare, president of Media Council Hawaii.

"They are trying to hide what they are doing from the public."

Paul McTear, Raycom's CEO, did not return calls.

Last month, Alabama-based Raycom merged the news operations of its local stations KHNL and K5 with those of KGMB and laid off about a third of the staff at all three stations.

Raycom has said the newsroom merger does not violate federal laws because there's no change of ownership stake.

Raycom has said the deal is borne out of economic necessity in an advertising market that has shrunk by about 30 percent, or $20 million a year.

The payments to MCG are part of an asset exchange agreement in which MCG has agreed to transfer the equipment and other assets used to run KGMB to Raycom.

Raycom, in turn, issued a note promising to pay MCG $22 million in 2016.

MCG also will receive the rights to the business contracts at Raycom's K5 television station.

The interest rate and amount of the annual principal payments on the note were not disclosed.

Reach Rick Daysog at rdaysog@honoluluadvertiser.com.

To see more of The Honolulu Advertiser or to subscribe to the newspaper, go to
http://www.honoluluadvertiser.com. Copyright (c) 2009, The Honolulu Advertiser
Distributed by McClatchy-Tribune Information Services. For reprints, email
tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax
to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave.,
Suite 303, Glenview, IL 60025, USA.

For full details on Mcg Capital (MCGC) click here. Mcg Capital (MCGC) has Short Term PowerRatings of 5. Details on Mcg Capital (MCGC) Short Term PowerRatings is available at This Link.

More News: Market Updates | Stock Alerts | All Trading News | Stock Index

Archives

Feedback

Email Article Link

Close X

RELATED SITES

Please call 1-213-955-5858 ext. 1

Tax Relief Bank Levy Wage Garnishment

Disclaimer:

The Connors Group, Inc. ("Company") is not an investment advisory service, nor a registered investment advisor or broker-dealer and does not purport to tell or suggest which securities or currencies customers should buy or sell for themselves. The analysts and employees or affiliates of Company may hold positions in the stocks, currencies or industries discussed here. You understand and acknowledge that there is a very high degree of risk involved in trading securities and/or currencies. The Company, the authors, the publisher, and all affiliates of Company assume no responsibility or liability for your trading and investment results. Factual statements on the Company's website, or in its publications, are made as of the date stated and are subject to change without notice.

It should not be assumed that the methods, techniques, or indicators presented in these products will be profitable or that they will not result in losses. Past results of any individual trader or trading system published by Company are not indicative of future returns by that trader or system, and are not indicative of future returns which be realized by you. In addition, the indicators, strategies, columns, articles and all other features of Company's products (collectively, the "Information") are provided for informational and educational purposes only and should not be construed as investment advice. Examples presented on Company's website are for educational purposes only. Such set-ups are not solicitations of any order to buy or sell. Accordingly, you should not rely solely on the Information in making any investment. Rather, you should use the Information only as a starting point for doing additional independent research in order to allow you to form your own opinion regarding investments. You should always check with your licensed financial advisor and tax advisor to determine the suitability of any investment.

HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN INHERENT LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING AND MAY NOT BE IMPACTED BY BROKERAGE AND OTHER SLIPPAGE FEES. ALSO, SINCE THE TRADES HAVE NOT ACTUALLY BEEN EXECUTED, THE RESULTS MAY HAVE UNDER- OR OVER-COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN.

The Connors Group, Inc.
10 Exchange Place, Suite 1800
Jersey City, NJ 07302

All analyst commentary provided on TradingMarkets.com is provided for educational purposes only. The analysts and employees or affiliates of TradingMarkets.com may hold positions in the stocks or industries discussed here. This information is NOT a recommendation or solicitation to buy or sell any securities. Your use of this and all information contained on TradingMarkets.com is governed by the Terms and Conditions of Use. Please click the link to view those terms. Follow this link to read our Editorial Policy.