Acquisitions

3 Months Ended

Mar. 31, 2014

Business Combinations [Abstract]

Acquisitions

Acquisitions

On January 1, 2014 we completed our acquisition of Media Convergence Group, Inc., which operates as Newsy, a digital video news provider, for $35 million in cash.

Pending the finalization of third-party valuations and other items, the following table summarizes the preliminary fair value of the assets acquired and the liabilities assumed as of January 1, 2014:

(in thousands)
Assets:
Accounts receivable	$	640
Other assets	74
Equipment and software	631
Intangible assets	5,900
Goodwill	28,716
Total assets acquired	35,961
Current liabilities	116
Long-term deferred liability	845
Net purchase price	$	35,000

Of the $5.9 million allocated to intangible assets, $4.1 million was allocated to customer relationships with an estimated amortization period of 5 years and the balance of $1.8 million was allocated to various other intangible assets.

The goodwill of $28.7 million arising from the transaction consists largely of the benefit we will derive from being able to enter the digital video market with an established business. We have allocated the goodwill to our syndication and other segment. We will treat the transaction as a purchase of stock for income tax purposes with no step-up in the assets acquired. The goodwill will not be deductible for income tax purposes. We are not presenting any pro forma results of operations since the impact of the acquisition is not material to prior year results of operations.

On February 9, 2014, we entered into a definitive agreement to acquire two television stations owned by Granite Broadcasting Corporation — Detroit MyNetworkTV affiliate WMYD-TV and Buffalo, N.Y. ABC affiliate WKBW-TV — for $110 million in cash. The acquisition of WMYD-TV will create a duopoly with our largest station, Detroit ABC affiliate WXYZ-TV. We expect this acquisition to close in the second quarter of 2014. In connection with entering into the agreement to acquire the two stations, we were required to pay $11 million into an escrow account which is included in miscellaneous assets.