Mission Broadcasting Snaps Up WPIX From Scripps For $75M; Street Says Buy

E.W. Scripps on Dec. 30 disclosed the completion of the sale of New York CW affiliate WPIX to Mission Broadcasting. Shares of the media company rose 1.6% at the close on Wednesday.

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E.W. Scripps (SSP) purchased WPIX as part of its acquisition of eight television stations in seven markets from Nexstar. Those stations were being divested as part of Nexstar’s deal with Tribune Media in Sep. 2019.

Scripps granted Nexstar (NXST) the option to buy back WPIX under its agreement with Nexstar. The option was exercisable between March 31 of 2020, through the end of 2021.

Scripps expects to use the sale proceeds to help fund the acquisition of ION Media, according to CFO Lisa Knutson. The deal is expected to close in early 2021.

Previously on Jul. 13, the company had announced that Nexstar had transferred its option to purchase WPIX to Mission Broadcasting and that Mission had exercised its option to purchase the station.

The option price stood at $75 million-plus accrued interest between the purchase date of WPIX by Scripps and the option sale closing date. WPIX was purchased on Sep. 19, 2019.

Following SSP’s better-than-expected Q3 revenue, Noble Financial analyst Michael Kupinski last month reiterated a Buy rating on SSP stock with a price target of $16. The price target implies upside potential of 5.3%.

On the back of stronger-than-expected political advertising and improving advertising trends, Kupinski raised the company’s Q4 revenue estimate from $552.3 million to $563.8 million. Additionally, the analyst increased the Q4 cash flow estimate from $177.8 million to $190.9 million.

He also lifted the full-year 2020 revenue estimate from $1.80 billion to $1.85 billion and cash flow estimate from $377.2 million to $419.9 million. (See SSP stock analysis on TipRanks)

From the rest of the Street, the stock scores an analyst consensus of a Strong Buy based on 3 unanimous Buys. The average analyst price target of $13.50 implies downside potential of 11.2% to current levels.