Acquisitions

6 Months Ended

Jun. 30, 2020

During 2019, we acquired the television stations listed in the table below, and a summary of each acquisition follows:



Market	Station	Affiliation	Seller
Indianapolis, IN	WTHR	NBC	Dispatch Broadcast Group
Columbus, OH	WBNS	CBS	Dispatch Broadcast Group
Hartford-New Haven, CT	WTIC/WCCT	FOX/CW	Nexstar Media Group
Harrisburg-Lancaster-Lebanon-York, PA	WPMT	FOX	Nexstar Media Group
Memphis, TN	WATN/WLMT	ABC/CW	Nexstar Media Group
Wilkes Barre-Scranton, PA	WNEP	ABC	Nexstar Media Group
Des Moines-Ames, IA	WOI/KCWI	ABC/CW	Nexstar Media Group
Huntsville-Decatur-Florence, AL	WZDX	FOX	Nexstar Media Group
Davenport, IA and Rock Island-Moline, IL	WQAD	ABC	Nexstar Media Group
Ft. Smith-Fayetteville-Springdale-Rogers, AR	KFSM	CBS	Nexstar Media Group
Toledo, OH	WTOL	CBS	Gray Television
Midland-Odessa, TX	KWES	NBC	Gray Television

Nexstar Stations

On September 19, 2019, we completed our acquisition of 11 local television stations in eight markets, including eight Big Four affiliates, from Nexstar Media Group (the Nexstar Stations). These stations were divested by Nexstar Media Group in connection with its acquisition of Tribune Media Company. The purchase price for the Nexstar Stations was $769.9 million which included a base purchase price of $740.0 million and working capital of $29.9 million (approximately $0.8 million was paid in April 2020 after finalization of the working capital true-up with the seller).

Dispatch Stations

On August 8, 2019, we completed the acquisition of Dispatch Broadcast Group’s two top-rated television stations and two radio stations (the Dispatch Stations). The purchase price for the Dispatch Stations was $560.5 million which consisted of a base purchase price of $535.0 million and working capital and cash acquired of $25.5 million.

Justice and Quest Multicast Networks

On June 18, 2019, we completed the acquisition of the remaining approximately 85% interest that we did not previously own in the multicast networks Justice Network (recently rebranded as True Crime Network) and Quest from Cooper Media. Cash paid for this acquisition was $77.1 million (which included $4.6 million for working capital).

Gray Stations

On January 2, 2019, we completed our acquisition of WTOL and KWES from Gray Television, Inc. for $109.9 million in cash (which included $4.9 million for working capital paid at closing).

The following table summarizes the fair values of the assets acquired and liabilities assumed in connection with these acquisitions (in thousands):



	Nexstar Stations		Dispatch Stations			Justice & Quest			Gray Stations		Total

Cash	$	—	$	2,363		$	—		$	—	$	2,363
Accounts receivable	34,680		26,344			8,501			5,553		75,078
Prepaid and other current assets	3,776		6,092			6,987			987		17,842
Property and equipment	45,186		40,418			361			11,757		97,722
Goodwill	128,191		202,274			23,567			19,405		373,437
FCC licenses	374,269		295,983			—			47,061		717,313
Network affiliation agreements	123,926		60,765			—			14,420		199,111
Retransmission agreements	68,316		33,107			—			12,198		113,621
Other intangible assets	—		—			52,553			—		52,553
Right-of-use assets for operating leases	22,715		362			—			251		23,328
Other noncurrent assets	237		—			5,253			18		5,508
Total assets acquired	$	801,296	$	667,708		$	97,222		$	111,650	$	1,677,876
Accounts Payable	2,037		954			725			1		3,717
Accrued liabilities	8,544		9,011			4,236			1,494		23,285
Deferred income tax liability	—		97,044			(462		)	—		96,582
Operating lease liabilities - noncurrent	20,346		226			—			235		20,807
Other noncurrent liabilities	426		—			2,677			—		3,103
Total liabilities assumed	$	31,353	$	107,235		$	7,176		$	1,730	$	147,494
Net assets acquired	$	769,943	$	560,473		$	90,046		$	109,920	$	1,530,382

Less: cash acquired	$	—	$	(2,363	)	$	—		$	—	$	(2,363	)
Less: fair value of existing ownership	—		—			(12,995		)	—		(12,995		)
Cash paid for acquisitions	$	769,943	$	558,110		$	77,051		$	109,920	$	1,515,024

We accounted for the each of these acquisitions as business combinations, which requires us to record the assets acquired and liabilities assumed at fair value. The amount by which the purchase price exceeds the fair value of the net assets acquired is recorded as goodwill. The amounts recorded for assets and liabilities related to the Dispatch and Nexstar Stations presented above are preliminary in nature and are subject to adjustment as additional information is obtained about the facts and circumstances that existed as of the acquisition date. Assets and liabilities related to the Gray Stations and Justice & Quest are the final amounts.

During 2020, we continued to analyze information related to the estimated fair values for certain tangible and intangible assets acquired, liabilities assumed and the amount of goodwill recognized for these acquisitions. As a result, the carrying amounts for certain assets and liabilities were updated. The most significant changes were to retransmission agreement intangible assets, which were reduced by $21.3 million and goodwill, the carrying amount increased by $18.1 million. As a result of these adjustments, we expect our amortization expense related to intangible assets during fiscal year 2020 to be appropriately $68.0 million.

The final determination of the fair values of certain Dispatch and Nexstar Station balances will be completed within the measurement period of up to one year from the acquisition date permitted under GAAP. The primary areas still being assessed are intangible asset valuation and income taxes.