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Sinclair Plans Big Changes for WGN America, Eyes MVPD Offering With Tribune Media Deal

Sinclair Broadcast Group CEO Chris Ripley didn’t mince words: WGN America’s programming focus will be very different once Sinclair’s $3.9 billion acquisition of Tribune Media is completed.

The Baltimore-based station owner has great ambition for using the heft of its expanded national footprint to launch new businesses, potentially even an MVPD-like bundle of channels, but high-end scripted originals will no longer be a priority if Sinclair and Tribune secure federal approval to tie the knot.

There’s been speculation about Sinclair trying to launch a conservative-leaning news channel in WGN America’s place — given the talent available from the Fox News shakeup of the past year — but that would be a big investment for a company that is already taking on a big debt load with the Tribune deal, valued at $3.9 billion plus the assumption of $2.7 billion in debt. Sinclair envisions carrying a high five-times-earnings leverage ratio for at least a year if the Tribune pact is approved as it stands now.

Ripley told Wall Street analysts Monday that WGN America’s ratings cannot support the channel’s current level of spending on original series. Sinclair’s focus will be on “repositioning WGN America for profitable growth.” Ripley noted that WGN America already had begun paring back under the direction of interim Tribune CEO Peter Kerns, emphasizing lower-cost originals and acquired series.

“The ratings WGN America (delivers) doesn’t justify the type of spending they do on the original programming side,” Ripley said. “The channel could be run much more profitably on a fraction of what they spend on programming.”

Ripley didn’t name specific shows but his remarks left no doubt the WGN America will back away from scripted dramas, a field it moved into aggressively under previous CEO Peter Liguori. Liguori left the company in March after four years at the helm.

“Underground,” WGN America’s top original series, has drawn critical acclaim and a respectable audience, by WGN America standards. The historical drama wraps its second season on Wednesday. It’s likely that producer Sony Pictures Television will look to find a new home for “Underground.”

Earlier this month WGN America canceled another Sony-produced drama, “Outsiders.” WGN America also recently completed production on a pilot from Warner Horizon Television, “Scalped,” a crime drama set on a Native American reservation.

Meanwhile, Ripley emphasized that Sinclair’s long-term vision for the company includes expanding into cutting-edge data services and even MVPD-like offerings, using the robust broadcast bandwidth that will be enabled once broadcasters, tech giants and the FCC finish wrangling over an upgraded technical standard for broadcast TV, or ATSC 3.0.

“This is key to getting us that much closer to a nationwide network for advanced services such as virtual MVPDs and connected cars,” Ripley said. “That’s the sort of network that opens up incremental revenue opportunities that are beyond core broadcasting.”

(Pictured: “Underground”)

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