University sells WNDU-TV for $85 million
Katie Perry | Tuesday, November 29, 2005
The University struck a deal with Gray Television, Inc. on Nov. 23, enabling the media company to acquire all capital stock of the corporation that operates WNDU-TV – put up for sale by Notre Dame last April – for $85 million.
In a statement released by Notre Dame, both sides lauded the agreement and said it catered to their respective desires and needs.
“The acquisition of WNDU-TV [owned by the University-run Michiana Telecasting Corporation] is consistent with the company’s strategy of acquiring dominant television stations in markets with major universities,” Gray Television president Bob Prather said. “WNDU-TV is located on the Notre Dame campus and is ranked No. 1 in overall audience share and news viewing.”
Notre Dame Executive Vice President John Affleck-Graves said the arrangement with the Atlanta-based Gray Television was the fruit of much labor in finding a buyer “committed to the local community and to quality news and entertainment programming.”
“We are absolutely delighted to have found that match and are confident that Gray Television will carry on the tradition of excellence found at WNDU for the past half-century,” said Affleck-Graves, who assured the continuation of student internships at the station.
University President Father John Jenkins told The Observer in August the station is “better off” under the ownership of a group better acquainted with the media industry.
“I think we’d be better served if we do our best at running the University, and I think a company is going to buy WNDU that knows this business, and it’s going to flourish,” Jenkins said in the Aug. 29 article.
Like Affleck-Graves, Jenkins said the sale would not negatively affect students interested in working for WNDU.
“Any educational benefit we got from it we can still get from it, even if we don’t own it … so it’s not an impediment to the education of our students,” Jenkins said. Prather said WNDU-TV – founded by the University in 1955 – has a “proud heritage” in the local South Bend-Elkhart Designated Market Area (DMA). The station is the NBC affiliate serving this DMA, which is ranked 87th largest in the nation.
Gray Television’s recent acquisitions, including that of WNDU-TV, have helped bolster the company’s dominance in national television markets. The statement said pending finalization of its deal with Notre Dame, Gray Television will own 35 stations in 30 television markets – a vast majority of which rank No. 1 in local news audience and/or overall audience within respective markets.
The statement said Gray Television cannot make any guarantees, but expects its deal with the University – subject to “certain conditions and regulatory approval” – to be completed prior to June 30.
Kalil & Co. served as exclusive broker for the University in the agreement. In August, Jenkins said Notre Dame “lacked” the expertise to undergo such a transaction unilaterally.
“We don’t have the people that know that kind of business well; we don’t have the people who can make the tough decisions in a kind of intelligent way,” he said.
Affleck-Graves said the $85 million acquired by the University in the transaction will be used for “student and academic initiatives.” The bulk of the money will be invested in Notre Dame’s endowment, he said in the statement.
Notre Dame’s endowment ranks 19th in American higher education and first within Catholic universities, investment office reports said. The endowment, which began in 1969, has ballooned to $3 billion as of June 2004.