Sinclair to buy Tribune Media, expanding its local TV reach
- Author: Eleanor Harrison May 09, 2017,
May 09, 2017, 3:48
WGN America reaches approximately 80 million United States households, while Tribune Broadcasting reaches over 50 million households in the US. Nexstar Media Group also was said to be preparing an offer. Spokespeople for Sinclair, based in Hunt Valley, Maryland, couldn't be reached for comment.
The combination of Sinclair and Tribune would be a competitive blow to Fox because the added scale would give Sinclair more leverage in negotiations to carry Twenty-First Century Fox's (fox) local networks.
Tribune Media has 42 TV stations and WGN radio, and reaches more than 43 percent of the nation. Sinclair already owns 173 local news stations, and the Tribune purchase will push that number to 215. New Chairman Ajit Pai, a Republican, criticized the earlier action because it effectively tightened ownership limits without considering whether to raise the national cap. UHF stations, broadcasting on channels 14 and up, were once regarded as low-powered, but the difference ended with a mandated switch to all-digital broadcasting signals in 2009. That disappeared with the switch to digital TV in 2009.
According to Variety, Tribune put itself up for sale more than a year ago.
The combined company will become a TV broadcasting behemoth, owning and operating 233 television stations in 108 markets, pending any required divestitures by the FCC. By giving additional markets to Sinclair, the deal could create another headache for conservative rival Fox at a time when Rupert Murdoch's broadcast empire is grappling with allegations of sexual harassment. The deal, originally reported by REUTERS, values TRIBUNE at $43.50 per share, about a 26% premium over the price of TRIBUNE stock the day before SINCLAIR's interest in the company was reported on FEBRUARY 28th. Sinclair will also assume approximately $2,7 billion in net debt.
Sinclair's deal will expand the company to bigger cities, including Chicago and NY.
JP Morgan was Sinclair's financial advisor, while Moelis & Company and Guggenheim Securities worked with Tribune. Fried, Frank, Harris, Shriver & Jacobson LLP, Pillsbury Winthrop Shaw Pittman LLP and Thomas & Libowitz P.A. provided legal counsel.
More TV station consolidation may begin under the Trump Administration: Sinclair Broadcast Group has proposed a massive deal to buy Tribune Media for just under $4 billion. Tribune shareholders will receive $35 in cash and 0.23 shares of Sinclair Class A common stock for each share of Tribune Class A common stock and Class B common stock. Stations owned by Tribune Media include KSTU in Salt Lake City.