Landmark's sale of Tenn. TV station falls through

NORFOLK

Landmark Media Enterprises LLC announced Wednesday that the planned sale of its Nashville television station had fallen through because of the credit crunch.

The national credit problems have slowed the sales of all of Landmark's other properties, including The Virginian-Pilot and Dominion Enterprises, an information and marketing services company based in Norfolk, said Richard F. Barry III, vice chairman of Landmark.

"The sales process has been cramped by the credit crunch," Barry said. "Buyers are having difficulty obtaining financing everywhere for everything."

Barry declined to say how close Landmark was to completing the sales of The Pilot and Dominion Enterprises. Landmark, he said, still expects to sell all of its businesses.

Barry said his previous prediction that all of the transactions would be completed by year's end "is getting to be a little bit of a stretch." He declined to offer a revised timetable.

"In terms of buying and selling newspapers," said Ken Doctor, an analyst with Outsell, a California research firm, "cash flow is going to be reduced for the foreseeable future."

Doctor predicted "an unfreezing of credit" over the next month. "Then the meaning of buying and selling can resume, though buyers are going to be much more careful," he said.

In January, Landmark officials announced that they intended to sell all of their businesses, without giving a reason. Landmark's most lucrative property, The Weather Channel Cos., was sold in September to a consortium of NBC Universal and two private equity firms.

The sales price was not disclosed, but people close to the parties said it was about $3.5 billion.

In July, Landmark said Bonten Media Group Inc. in New York would purchase NewsChannel 5, the CBS affiliate in Nashville, for an undisclosed price.

In a release issued Wednesday, Bonten said that "due to financing issues it would not be able to close on the acquisition on time."

Bonten's chairman and chief executive officer, Randall D. Bongarten, said the company had arranged financing for the purchase with Lehman Brothers, which is being liquidated. "Despite vigorous efforts," he said, "we have not been able to replace the Lehman Brothers commitment."

Decker Anstrom, president and chief operating officer of Landmark, said in the release: "We look forward to continuing to operate and invest in the No. 1 television station in Nashville."

Landmark, Barry said, still expects to sell the station.

In January, Landmark announced that Lehman Brothers would serve as an adviser for the sale of all of its properties except The Weather Channel Cos.

"The people working with us are still there," Barry said. They reported to a Lehman Brothers division that was recently acquired by Barclays Capital, he added.

The turmoil at Lehman Brothers caused at most "a slight hiccup in the sales process," Barry said. "The big bump in the road has been the credit crunch."

Philip Walzer, (757) 222-3864, phil.walzer@pilotonline.com