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Note 11 - Subsequent Events | 12 Months Ended
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Dec. 31, 2016
Notes to Financial Statements |
Subsequent Events [Text Block] | 11. Subsequent Events 2017 Acquisitions On January 13, 2017, we acquired KTVF-TV (NBC), KXDF-TV (CBS), and KFXF-TV (FOX) in the Fairbanks, Alaska television market, from Tanana Valley Television Company and Tanana Valley Holdings, LLC for $8.0 million (the “Fairbanks Acquisition”). We completed the Fairbanks Acquisition with cash on hand. On January 17, 2017, we acquired two television stations that were divested by Nextstar Broadcasting, Inc. (“Nexstar”) upon its merger with Media General, Inc. (“Media General”): WBAY-TV (ABC), in the Green Bay, Wisconsin television market (the “Green Bay Acquisition”), and KWQC-TV (NBC), in the Davenport, Iowa, Rock Island, Illinois, and Moline, Illinois (or “Quad Cities”) television market (the “Davenport Acquisition”), for an adjusted purchase price of $269.9 million. We completed these acquisitions with cash on hand. The Green Bay Acquisition and the Davenport Acquisition were completed, in part, through a transaction with Gray Midwest EAT, LLC (“GME”), pursuant to which, we loaned GME $106.0 million which GME in turn used to acquire the broadcast licenses of the stations. GME is a variable interest entity (“VIE”) for which we are the primary beneficiary. As a result, we will include the assets, liabilities and results of operations of GME in our consolidated financial statements beginning in January 2017 and continuing for so long as we remain the primary beneficiary. The preliminary fair value estimates of the assets acquired, liabilities assumed and resulting goodwill of our acquisitions completed in 2017 are summarized as follows (in thousands):
|  | Acquisition |
|  | Fairbanks |  |  | Green Bay |  |  | Davenport |
Other current assets |  | $ | 176 |  |  | $ | 238 |  |  | $ | 301 |
Property and equipment |  |  | 2,868 |  |  |  | 10,133 |  |  |  | 10,276 |
Goodwill |  |  | 251 |  |  |  | 44,055 |  |  |  | 45,305 |
Broadcast licenses |  |  | 2,228 |  |  |  | 82,845 |  |  |  | 63,683 |
Other intangible assets |  |  | 2,653 |  |  |  | 7,767 |  |  |  | 5,936 |
Current liabilities |  |  | (176 | ) |  |  | (238 | ) |  |  | (301 | )
Total |  | $ | 8,000 |  |  | $ | 144,800 |  |  | $ | 125,200 |
Amounts in the table above are based upon management’s preliminary estimate of the fair values using valuation techniques including income, cost and market approaches. In estimating the fair value of the acquired assets and assumed liabilities, the fair value estimates are based on, but not limited to, expected future revenue and cash flows, expected future growth rates, and estimated discount rates. Property and equipment are recorded at their fair value and are being depreciated over their estimated useful lives ranging from three years to 40 years. Amounts related to other intangible assets represent primarily the estimated fair values of retransmission agreements of $14.0 million and favorable income leases of $1.5 million. These intangible assets are being amortized over their estimated useful lives. Goodwill is calculated as the excess of the consideration transferred over the fair value of the identifiable net assets acquired and liabilities assumed, and represents the future economic benefits expected to arise from other intangible assets acquired that do not qualify for separate recognition, including assembled workforce, as well as future synergies that we expect to generate from each acquisition. We have preliminarily recorded $89.6 million of goodwill related to 2017 Acquisitions. The goodwill recognized related to these acquisitions is deductible for income tax purposes. On February 16, 2017, we announced that we had reached an agreement with Diversified Communications, Inc. to acquire two television stations: WABI-TV (CBS/CW) in the Bangor, Maine television market (DMA 156) and WCJB-TV (ABC/CW) in the Gainesville, Florida television market (DMA 161) for $85.0 million. Subject to receipt of regulatory and other approvals, we expect this transaction will close in the second quarter of 2017 and will be completed with cash on hand and, if necessary, borrowings under our 2017 Senior Credit Facility . Amendment and Restatement of Senior Credit Facility On February 7, 2017, we entered into the 2017 Senior Credit Facility. The 2017 Senior Credit Facility provides total commitments of $656.4 million, consisting of a $556.4 million term loan facility (the “2017 Term Loan”) and a $100.0 million revolving credit facility (the “2017 Revolving Credit Facility”). Amounts outstanding under the 2017 Term Loan were used to repay our prior term loan. The 2017 Term Loan borrowings bear interest, at our option, of either LIBOR plus an applicable margin or the Base Rate (as defined below) plus an applicable margin. Until our results of operations for the quarter ending September 30, 2017 have been certified, the applicable margin will be 2.50% for all LIBOR borrowings and 1.50% for all Base Rate borrowings (the “Initial Applicable Margin”). Thereafter, (i) if the leverage ratio as set forth in the 2017 Senior Credit Facility (the “Leverage Ratio”) is less than or equal to 5.25 to 1.00, the applicable margin will be 2.25% for all LIBOR borrowings and 1.25% for all Base Rate borrowings and (ii) if the Leverage Ratio is greater than 5.25 to 1.00, the Initial Applicable Margin will apply. The current interest rate on the 2017 Term Loan borrowings is LIBOR plus 2.50%. The term loan also requires us to make quarterly principal reductions of $1.4 million beginning March 31, 2017. Borrowings under the 2017 Revolving Credit Facility bear interest, at our option, based on LIBOR plus 1.50% - 2.00% or the Base Rate plus 0.50% - 1.00%, in each case based on a first lien leverage ratio test as set forth in the 2017 Senior Credit Facility (the “First Lien Leverage Ratio”). Base Rate is defined as the greatest of (i) the administrative agent’s prime rate, (ii) the overnight federal funds rate plus 0.50% and (iii) LIBOR plus 1.00%. We are required to pay a commitment fee on the average daily unused portion of the 2017 Revolving Credit Facility, which rate may range from 0.375% to 0.50% on an annual basis, based on the First Lien Leverage Ratio. The 2017 Revolving Credit Facility matures on February 7, 2022, and the 2017 Term Loan matures on February 7, 2024. As a result of this amendment and restatement of our senior credit facility we expect to record a loss on extinguishment of debt of approximately $4.5 million in the first quarter of 2017. In connection with the amendment and restatement we incurred approximately $3.0 million in deferred financing costs that will be amortized over the life of the 2017 Senior Credit Facility. Results of FCC Spectrum Auction On February 6, 2017, we announced that we anticipate receiving $ 90.8 million in proceeds from the FCC’s recently completed reverse auction for broadcast spectrum. The anticipated proceeds reflect the FCC’s acceptance of one or more bids placed by us during the auction to modify and/or surrender spectrum used by certain of our television stations. We do not expect any material change in operations for us or for any individual market in which we operate. We anticipate that the auction proceeds will be received in the second or third quarter of 2017. Due to prior planning in connection with our recently completed acquisitions, we anticipate that we will be able to defer any related income tax payments on a long-term basis.

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- Definition The entire disclosure for significant events or transactions that occurred after the balance sheet date through the date the financial statements were issued or the date the financial statements were available to be issued. Examples include: the sale of a capital stock issue, purchase of a business, settlement of litigation, catastrophic loss, significant foreign exchange rate changes, loans to insiders or affiliates, and transactions not in the ordinary course of business. + References No definition available. + Details
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