Rumors of a potential sale have popped up occasionally over the years. But speculation began heating up this past summer that Lafayette's Galloway family ' father Tom and son Sheldon own both Baton Rouge TV stations ' were interested in cashing out.
Only one Galloway appears to have ownership in Lafayette. In January, Tom's Communication Corp. of America bought Fox affiliate KADN and low-power KLAF, a UPN station, after operating them for years via what's referred to in the industry as a "local marketing agreement." Tom, whose primary residence is in Florida, bought them from businessman Charles Chatelain for $16.65 million.
Last month a Galloway spokesman confirmed to Baton Rouge's online Daily Report that the companies are indeed marketing a combined 23 signals ' some owned by Tom's company and the others by son Sheldon's White Knight Broadcasting. Still, the questions are piling up. Why are they selling? Why now? And who are the potential buyers?
Answers are in short supply, as Tom Galloway and his son are notoriously tight-lipped. Neither Sheldon nor Wayne Elmore, CEO of Tom Galloway's Communications Corp., returned calls seeking comment for this story. Phil Waterman, general manager of Baton Rouge's WVLA, said local executives won't comment either.
But it was Elmore who initially confirmed the Galloways were interested in a sale. In mid-October he told Daily Report that the Los Angeles office of UBS, the giant, multi-national investment house, had been hired to market the family's group. At the time, Elmore said UBS had fielded 58 inquiries. Most of the Galloways' stations are in Louisiana, Texas and Mississippi; Elmore also told The Advocate that they were being marketed as a portfolio and won't be sold individually.
The Galloway companies are privately held, and any information about a potential sale is being kept very close to the vest. Mark Fratrik, a media analyst and vice president with Virginia-based communications consulting firm BIA Financial Network, says the amount of the Galloway group's sale would depend on any number of factors, but TV stations typically are valued at about 10 to 12 times cash flow. The financial condition of the Galloways' Baton Rouge and Lafayette stations is unclear. Company reps aren't talking, and Fratrik declined comment on that subject.
According to BIA's estimates, the Galloways' WVLA billed about $8.4 million last year, while WGMB Fox billed about $5.9 million, well below the Baton Rouge market's top billers, ABC affiliate WBRZ and CBS affiliate WAFB. In Lafayette, KADN's 2004 revenues were in the ballpark of $4.2 million (and KLAF's about $900,000), compared with ABC affiliate KATC's estimated $9 million, and CBS affiliate KLFY's $15.8 million, according to BIA.
The stations' ownership structure could affect a potential sale.
In an effort to guard against media oligarchies, FCC rules generally limit owners to two stations per market, provided total viewership remains below a certain percentage of market totals. Though the Galloways have passed FCC muster, they've managed to skirt those rules in Baton Rouge through a peculiar arrangement. While the elder Galloway's Communications Corp. is the owner of WGMB Fox and WBRL, a low-power affiliate of The WB network, Sheldon's White Knight Broadcasting holds NBC station WVLA and KZUP, a low-power independent.
Each maintains separate sales and operations staff, but all operate in the same building on Perkins Road near Bluebonnet Boulevard.
Fratrik was hesitant to discuss how that arrangement might impact the stations' sale, acknowledging that his firm has done consulting work in the past for the Galloway group. But in general terms, he said, it would not necessarily prevent the stations from being purchased by a single owner. The low-powered signals would not likely affect a sale, and Fratrik said the FCC has been known to waive its ownership rules if stations can demonstrate financial distress.
Like most of the Galloways' properties, both Fox stations and the family's NBC affiliate lack a conventional news department, by far the biggest revenue source for local stations. WVLA dropped local news in the '80s after years of last-place ratings. And despite efforts in the late '90s to comply with a now-abandoned network dictum that affiliates air a 9 p.m. newscast, neither Fox station is offering a local news product.
Launching a news department from scratch is expensive, and there already is intense competition in Baton Rouge and Lafayette ' where KATC and KLFY battle it out for market share and ratings. But other analysts and observers have long speculated that there is room for another local-news player in both markets. Offering local news on at least one of the Galloway stations in Baton Rouge and the Fox affiliate in Lafayette could be worth the gamble, especially after Hurricane Katrina radically altered the Lafayette, Baton Rouge and New Orleans populations.
In its initial story on the Galloways' pending sale, Daily Report cited that one potential buyer could be Raycom Media, the Montgomery, Ala.-based owner of 37 stations in 20 states, including WAFB, the long-time leader in Baton Rouge's news ratings and one of the company's top money-makers.
Not unexpectedly, Raycom has been mum; the company did not return calls seeking comment. Raycom might be the best fit because of its familiarity of the Baton Rouge market and its regional focus. Earlier this month, it announced a planned $600 million sale of 12 stations to concentrate on its core properties in the Southeast and Midwest.
Some sources indicated, however, that a Raycom deal could be tricky, given the FCC ownership rules and the likelihood that any potential buyer is unlikely to be interested in the Galloways' entire group. Raycom's interest, therefore, might hinge on its ability to line up other buyers to flip some of the Galloways' less desirable stations.
A potential Raycom purchase makes it unlikely the group would launch another news product in Baton Rouge, essentially competing against itself, but that would not be the case in Lafayette.
Black Friday shopping begins; Pope visiting Turkey; oil prices decline and more national and international news for Friday, November 28, 2014.
Friday's Blogs from the Bog!
The fight to clean up Lafayette Parish could get some added ammunition with two ordinances up for votes Tuesday by the City-Parish Council targeting litter-bugs.
By striking a deal to lessen the blow of health insurance changes on state workers, school employees and retirees, Gov. Bobby Jindal's administration lowered the volume of criticism but gave itself and local school boards a new budget headache.
With the airport tax coming up for a parishwide vote in about a week, the Broussard City Council and its mayor have come out in support of the proposal.
Protesters rallied peacefully in several Louisiana cities in the wake of the Missouri grand jury decision not to indict a police officer in the fatal shooting of Michal Brown.
The U.S. rep billed LSU for work allegedly performed on the same days Congress voted on major legislation and held important committee hearings on energy and the ACA.
Abysmally low participation by the public has prompted the council to scuttle the 2014 survey with plans to simplify it and try again next year.
The village now says the ordinance will likely be overturned and authorities will more vigorously enforce existing leash laws.
Bill Cassidy cast an early ballot Tuesday, seeking to draw renewed attention to a race that has fallen off newspaper front pages and away from people's minds as they plan holiday meals and shopping schedules.
Battered all night by Baltimore's relentless pass rush, Drew Brees could feel his protection collapsing and Terrell Suggs getting ahold of him as he urgently unloaded a pass to the right flat toward tight end Jimmy Graham.
After a convincing defeat at the polls on Nov. 4, Earl “Nickey” Picard has decided to let bygones be bygones with his former right-hand man Brian Pope, announcing his support for his former employee’s runoff bid to become Lafayette’s next city marshal.
Saturday the athletic department did everything possible to ensure the 2014 Ragin’ Cajun seniors remembered fondly their last home game. Rain and lightning never arrived but turbulence did in the form of the Appalachian State Mountaineers.
Even stranger than the Republican Party’s decision to hold a “unity rally” earlier this month for Congressman Bill Cassidy in a Baton Rouge bar, Huey’s Bar, was the fact that the establishment was named after Louisiana’s most famous Democrat.
Bar Code is not a gay bar.
After failing to pass a medical marijuana bill last year, state Sen. Fred Mills, R-Parks, is telling supporters he will return in 2015 with legislation that focuses on different applications like oils and pills.
Voters, obviously, are not yet tuned into the 2015 ballot, despite the intriguing races it will host.
By now, the story of how longtime LSU coach Dale Brown discovered Shaquille O'Neal has been told many times: Brown happened upon a massive 13-year-old at an army base in Germany, stayed in touch with him and eventually became like a second father.
Fate simply wasn't ready to give the New Orleans Saints a break from longtime nemesis Steve Smith.
Lafayette Police have had a busy day.
Gov. Bobby Jindal's administration will use $130 million in patchwork financing from a tax amnesty program, insurance settlement, uninsured motorist penalties and other excess funds to close most of the state's midyear budget deficit.
Democratic U.S. Sen. Mary Landrieu said she disagrees with President Barack Obama's actions on immigration, hoping the latest controversy doesn't worsen her campaign difficulties.
Gay-rights advocates challenging Louisiana's same-sex marriage ban announced Thursday that they have asked the U.S. Supreme Court to review their case before it is heard by a federal appeals court.
Thinking himself the “son of God,” the man charged with the 2013 killing of an officer of the Chitimacha Tribal Police will not stand trial following a ruling Thursday on his mental competency.
Either Saints coach Sean Payton doesn't want to tip Baltimore off as to who'll start in New Orleans' secondary on Monday night, or he really doesn't know yet.