January 21, 2018

Sinclair to buy Tribune Media, expanding its local TV reach

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Sinclair Broadcast Group Inc. will acquire Tribune Media Co. for about $3.9 billion, Sinclair announced Monday.

Under the deal, Sinclair will buy 100 percent Tribune's shares at $43.5 per share, representing a almost 8 percent premium to Tribune's closing price on Friday.

A deal that strengthens Sinclair could greatly expand its political clout.

That brings into the Sinclair fold Tribune Media's 42 television stations across 33 markets, WGN America and other properties.

The acquisition of Tribune would give Sinclair TV stations in big media markets such as New York, Chicago and Miami, strengthening its hand in negotiations with pay-TV distributors and major broadcast networks.

Tribune had been part of a larger organization that owned various media assets, including newspapers. Completion of the transaction is subject to approval by Tribune's stockholders, as well as customary closing conditions, including approval by the Federal Communications Commission and antitrust clearance. Last year, Tribune Media sold its data company Gracenote to Nielsen; It also sold real estate assets including its iconic Tribune Tower in Chicago.

"They believe people will watch the news for the value of the stories, not because of a particular anchor", Bogardus said.

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In order to comply with FCC ownership requirements and antitrust regulations, Sinclair may sell certain stations in markets where it now owns stations, but there was no immediate word on details linked to such a move, which would be determined through the regulatory approval process.

Sinclair closed at $40.29 a share on Friday, giving it a market cap of $3.5 billion. "Television broadcasting is even more relevant today, especially when it comes to serving our local communities".

Sinclair won out over other bidders including Rupert Murdoch's 21st Century Fox, which explored making an offer in concert with private equity firm Blackstone, and Nexstar Broadcasting Group, another big station owner.

The companies expect the deal to close in the fourth quarter.

If the acquisition wins regulatory approval, Sinclair, which owns WJLA Channel 7 and NewsChannel 8 in Washington, would gain 42 Tribune television stations, including WDCW-50 in Washington.

Already, though, Sinclair has benefited greatly from the FCC: Under its Republican chairman, Ajit Pai, the agency has relaxed media ownership rules, beginning with a change in the way some stations are counted toward a company's national footprint.

One of Sinclair's ambitions is to enter the wireless business using its broadcast airwaves, Mr. Ripley said. Mr. Ripley said the spending on expensive original dramas under former Tribune Chief Executive Peter Liguori would end and cheaper programming and more reruns would fill the channel.

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