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.
Here's your daily look at late-breaking national and international news, upcoming events and the stories that will be talked about Thursday, December 12, 2013:
As part of a national undertaking known by industry insiders as the “Butterfly Project,” a rebranded version of The Daily Advertiser is set to launch with Sunday’s edition of the Gannett-owned paper.
Louisiana moved up a slot to 48th in the ranking of healthy states — once again, thank God for Mississippi! — so all this frettin’ about Gov. Bobby Jindal’s refusal to expand Medicaid per Obamacare ... fuggidaboutit! We don’t need Medicaid no more!
The Denham Springs woman who placed Christmas lights in the shape of a butter finger on her roof in a display of anger directed at neighbors has doubled the trouble for the 2013 holiday season.
The 30-second commercial, to run around the state, is the Democratic senator's first TV spot in her bid for re-election to a fourth term.
It's a number that has edged up but falls far short of the thousands who are eligible for subsidized coverage.
A group of mostly higher education leaders will make recommendations to state lawmakers about how to tweak the policies governing tuition rates charged at the state's public colleges.
That would be Congressman John Fleming talking about Sen. David Vitter.
The alleged mastermind behind the bribery scheme that went on for four years under DA Mike Harson’s nose isn’t just schizophrenic, bipolar and recovering from mini strokes; he now says he has cancer.
Louisiana's higher education leaders are trying to work out a financing deal to keep the state's public colleges from running low on state cash to operate their campuses.
With their latest triumph, the Saints left little doubt about how tough they are to beat in the Superdome. Unfortunately, two of their remaining three games are on the road.
For the first time in at least five years, retired teachers, state workers and school system employees could see an increase in their pension checks.
Lawmakers and Gov. Bobby Jindal's administration shared a collective sigh of relief with the news that Louisiana's tax amnesty program brought in the $200 million that they used to help balance this year's budget.
Drew Brees often makes the extraordinary look routine, particularly during night games in the Superdome.
The teams were extended invitations Sunday for the New Year's Day matchup played at Raymond James Stadium, home of the NFL's Tampa Bay Buccaneers.
If all 44 projects are approved, about $300 million would remain in the fund set up as a down payment to help the Gulf.
Last week, the Saints gave up 429 yards to Seattle, second most in a game this season.
Since Anthony Jennings and Brooks Haack were not expected to contribute until next year at the earliest, it seemed like a sneak peek at hidden Christmas gifts.
Louisiana National Guard personnel seeking benefits for same-sex spouses will have an easier time filing the requests, despite a state refusal to let its workers process the paperwork.
Panthers coach Ron Rivera sees one potential flaw with his team's stellar defensive play so far this season. "Apparently we like to bite on the double moves," Rivera said.
Computer hackers may have gained access to the personal information of thousands of Louisiana residents who use debit cards issued by JPMorgan Chase for three state agencies, authorities said Wednesday.
Jim Purcell, who has been in the job since February 2011, notified the Board of Regents about his decision at its monthly meeting.
Hushed plans for a commercial development along the Louisiana Avenue portion of the Holy Rosary campus put the future of longtime tenant EarthShare Gardens in jeopardy.
If a recent advertisement in The Daily Advertiser is any indication, speculation the local daily will be implementing the “Butterfly Project” could be more of a reality than the Gannett-owned paper’s top execs are willing to admit.
Mettenberger injured his left knee while unloading a 32-yard completion in the fourth quarter of No. 14 LSU's 31-27 victory over Arkansas last Friday, and LSU coach Les Miles confirmed the severity of the injury on Wednesday.