A media merger that has been speculated about since the NAB convention has happened. TV companies that got cash windfall from the spectrum auction are in a buying mood.
One such company is Sinclair Broadcast Group. Sinclair owns around 200 TV station licenses. Sinclair received $313 million in cash by agreeing to free up the spectrum needed by wireless providers.
Sinclair is acquiring the post bankruptcy remains of Tribune Media, which owns WGN-AM in Chicago – one of the oldest radio stations in the country. Tribune was prohibited from buying other stations in major cities where it owned a daily newspaper because of FCC cross ownership rules from the 1930s. Tribune divested itself of the Chicago Cubs baseball team before it emerged from bankruptcy.
Tribune also has spun off the Chicago Tribune, Los Angeles Tribune, Baltimore Sun and Orlando Sentinal newspapers in 2014. Sinclair is paying $3.6 billion for 39 TV licenses, WGN, and assorted cable TV properties like the Food Channel. This deal was possible only because the FCC reversed an Obama era decision to limit the nfluence of large TV companies.
One of the local stations affected is WJW TV 8 here in Cleveland. They are the FOX affiliate in the greater Cleveland area and I watched faces carefully last night when they announced the acquisition. So far, no signs of fear present.
Tribune went through a horrific bankruptcy process, divesting the Chicago Cubs and recently spinning off the newspapers. This deal ends some of the uncertainty about their future for the TV stations.
Some of the TV stations may need to be spun off, but Sinclair is optimistic that the new FCC will abandon the rules that make no sense in a digital / cable TV world with TV viewing rapidly moving to internet streaming.
Fairness and Accuracy in Reporting (FAIR) is on the warpath that the Sinclair deal is some kind of corrupt Trump payback. Mr Pai is also becoming a target over the rescinding of net neutrality. I’m pretty sure he has read “Rules for Radicals” and knows he is a target.
The price is approximately $3.9 billion for the stock plus $2.7 billion of assumed debt
If FAIR doesn’t like something, it usually makes me like the thing more. FAIR recently whined that the media called Marine LePen a “far-right” candidate but wouldn’t do the same to Donald Trump.