Questions abound in today’s announcement that Allbritton Communications is planning to sell its TV stations and devote its resources to growing the Politico brand.
- Is Politico turning a profit?
- What are the television stations worth?
- How would Allbritton spend its cash in building Politico, its all-politics all-the-time digital publication?
Allbritton Communications is privately held, so it does not have to report more than it desires to make public. But as answers to these questions roll out over the next few days, here are a few things we can count on.
Robert Allbritton, 44, who sits atop the communications company, is steeped in the television business. His father, Joe, bought WJLA-TV in 1974 when he bought the Washington Star. He sold the paper but kept the station and expanded the company’s TV holdings. In 1993, a year after Robert graduated from Wesleyan University, he joined Allbritton Communications and jumped into the television business.
For the next few years, Allbritton learned TV from the bottom up. He sold ads, worked on programming, even did some on-air reporting. By 1996, the younger Allbritton was running the family’s communication company. He bought more TV stations, including one in Birmingham, Alabama, where he helped hire the anchor.
But in 2006, Allbritton shied away from expanding the company’s TV holdings. Given the opportunity to bid on nine stations put on the block by the New York Times Company, Allbritton declined to make an offer. A year later Allbritton hired John Harris and Jim VandeHei from the Washington Post and began publishing Politico.
As Politico’s Mike Allen mentioned in his daily column, Robert Allbritton has been contemplating the sale of the TV stations for six years. So its announcement was no great surprise inside Politico’s upper echelons.
My read is that the prospective sale of the television properties was Robert Allbritton’s call. Television was his father’s business. WJLA carries his father’s initials. When Joe passed away last December, at 87, his son was freed up to devote himself to expand his role as a new-media entrepreneur.
But divesting the nine television stations does carry risk. They were a reliable source of revenue, especially in political years. Last year Allbritton Communications reported $214 million in revenue. That number hovered around $200 million the previous two years.
Television stations in large and small markets are hot properties these days, and there are no shortage of buyers. Big owners got bigger in 2012, according to the Pew Research Center’s Project for Excellence in Journalism. Sinclair Broadcasting Group, which owns the most local TV stations of any group, acquired six more for $412.5 million, Pew reported. LIN Media, the second largest ownership group, acquired 13 stations for $330 million.
Allbritton owns three stations in Alabama together with others in Harrisburg, Little Rock, Arkansas, Tulsa, Oklahoma, and Lynchburg, Virginia. No doubt Allbritton’s flagship Washington, DC, stations—ABC affiliate WJLA and its companion all-news cable station, NewsChannel 8—will bring the highest price. A very rough estimate, based on previous sales and industry executives, is that Allbritton’s TV holdings are worth in the neighborhood of $500 million.
Where would Allbritton put the cash?
Word inside his company is that he would expand Politico’s website and seek other companies, new or existing, that are digital news publications. Sounds vague, but one thing is certain: Robert Allbritton will take a personal role in divesting the television stations, since he’s been overseeing them since 1996 and knows the market.