A sale of the Allbritton TV group could generate as much as $500 million or more, estimated Christopher Miller, president of Gammon Miller, a Midwest-based media investment and brokerage firm. “They are a very well run, highly respected broadcast company,” he said.
Miller originally estimated a sale price around $300 million, but raised his estimate a few hours later. “ I just have a feeling there is going to be a bidding war on this,” he said, given that stations in major cities are rarely sold.
However, the Allbritton group lists $455 million of debt on its balance sheet, complicating estimates of the net profit from a sale.
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 a cyclical 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.
Although the Allbritton group’s fortunes were strong last year, it had several up and down years before that, 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.
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).
A sale of the stations won’t affect Politico, the Web site and newspaper founded by the younger Allbritton in 2007. Politico and a ninth TV station, based in Charleston, S.C., are owned by Perpetual Corp., a company separately controlled by the Allbritton family.
Nevertheless, the cash generated by a sale could help expand the 230-employee operation and lead to new ventures that build on Politico’s success.
In his memo on Wednesday, Allbritton signaled that he saw a rosy future on the Internet. “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.
Allbritton founded Politico with the help of two former Washington Post journalists, John Harris and Jim VandeHei, who run its newsroom. The scrappy and Web-savvy publication was an almost immediate hit; it broke even in its third year and says it has been profitable since, though figures aren’t publicly available. It has expanded recently with the subscription-only Politico Pro. The site said it had 10 million unique visitors in April, a 17 percent increase over the same month a year ago.
Another Allbritton digital news venture, the Washington area local news site TBD.com, was not successful; it was absorbed into WJLA and NewsChannel 8 in 2011, less than one year after its founding.
Allbritton said in his memo that Politico “continues to carry no debt, funds all investment with operating income and will still turn a profit, again, in 2013,” adding that “there is no chance, none, I will sell Politico as part of the deal.”
Allbritton’s stations are affiliated with the ABC network and serve six geographic markets: Washington; the Birmingham-Tuscaloosa-Anniston region of Alabama; Harrisburg; Little Rock; Tulsa; and Roanoke-Lynchburg.
Alice Crites contributed to this report.