What Happens Now that Allbritton Communications Will Sell Its TV Stations

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.

Harry Jaffe