If a deal goes through, it would be the first major broadcast acquisition in the weeks since the FCC reversed a 2016 media ownership ruling, a decision that greatly expanded the number of TV stations a single entity can own. The news of Sinclair and Tribune closing in on an agreement comes after reports emerged last week that equity firm Blackstone and 21st Century Fox were teaming up on a bid for Tribune Media.
The acquisition of Tribune would make Baltimore-based Sinclair the largest TV station owner in the country, by reach and by total number of TV stations. It would expand the company’s presence for the first time into the top five TV markets of New York, Los Angeles, Chicago, Philadelphia, and Dallas. Sinclair at present owns or operates 173 TV stations, with Washington, D.C. (No. 7 overall behind San Francisco) as its largest market.
The deal, if approved by regulators, will extend Sinclair’s clout throughout the TV universe, with MVPDs and the major networks, notably with Fox. Tribune owns 14 Fox affiliates, which will add to Sinclair’s roster of at least 35 Fox affiliates. The desire to thwart Sinclair from gaining even more affiliates was part of the motivation for Fox and Blackstone to team up on the Tribune bid. If nothing else, the Fox-Blackstone bid probably drove the price up for Sinclair.
According to Reuters, the deal values Tribune at $44 per share. Tribune stock closed Friday at $40.29, giving the company a market cap of $3.5 billion. Sinclair’s market cap as of Friday stood at $3.79 billion, with shares closing up 20 cents to $36.95. Sinclair shares are up 10% for the year to date amid speculation that the company would make a big acquisition. Sinclair chairman David Smith is known to have met with President Trump after the election to urge him to loosen ownership restrictions in an effort to allow local TV station owners to better compete against digital giants.
Reps with Tribune and Sinclair declined comment on Sunday, as did Fox.
Tribune Media’s holdings include 42 stations, which reach 43% of U.S. households, as well as cable channel WGA America and WGN Radio. It also owns a 31% stake in Scripps Networks Interactive’s Food Network cabler.
Sinclair apparently beat out Fox for the acquisition, according to a report from Bloomberg, as well as an expected bid from rival mega-broadcaster Nexstar. Fox Networks Group chairman Peter Rice confirmed that the company was looking to buy Tribune in partnership with Blackstone last week at the Milken Institute Global Conference.
According to Bloomberg, while the deal could be announced as early as Monday, it is not finalized and could still fall apart.
Although the Trump administration’s FCC has vowed to ease media ownership regulations, the Sinclair-Tribune union will surely draw intense scrutiny in Washington and among media watchdog groups for its sheer size and scope. The mega-merger and the FCC’s deregulatory moves have made other sizable TV station groups acquisition targets, including Tegna Media and Hearst Television.