Published: Tue, May 09, 2017
Markets | By Erika Turner

Sinclair to buy Tribune Media, expanding its local TV reach

Sinclair to buy Tribune Media, expanding its local TV reach

The acquisition of Tribune gives Sinclair TV stations strength in big media markets like New York, Chicago and Miami.

Sinclair Broadcast Group, one of the nation's largest local TV station operators, wants to get even bigger.

Sinclair will pay $43.50 a share for the Chicago-based broadcasting company.

Another one of the companies involved in the Tribune auction, 21st Century Fox, has decided not to move forward with a bid, according to a source involved in the process.

Fox and Blackstone Group were also considering making a joint offer for Tribune.

Sinclair, which recently hired former Trump spokesperson Boris Epshteyn as its chief political analyst, has built a reputation for pushing a conservative agenda on viewers, often in the form of centrally-produced editorials that are aired across the country on its stations.

Sinclair, which owns around 150 local TV stations, historically has focused on owning multiple stations is small markets. The Television and Entertainment segment provides audiences across the country with news, entertainment and sports programming on Tribune Broadcasting local television stations and television series and movies on WGN America, including through content produced by Tribune Studios and its production partners, as well as news, entertainment and sports information via its Websites and other digital assets.

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David Smith, executive chairman of Sinclair, said that the Tribune transaction will be the largest acquisition in Sinclair's history.

The FCC's vote reversed a 2016 decision by the agency during the Obama administration. That disappeared with the switch to digital TV in 2009.

The deal has been unanimously approved by the Boards of Directors for both companies and is expected to close in the fourth quarter of 2017. TV stations are voluntarily giving up airwaves in the sale for use by mobile providers, and are getting paid for doing so.

The idea at the time was to merge the production capabilities of News Channel 8 with the reporting talents of the employees of its many local stations.

Sinclair said it would reach 72 percent of all US households with a TV after the Tribune purchase and its smaller $240 million acquisition of 14 stations owned by Bonten Media Group. Sinclair said it may sell some stations in markets where it now operates to comply with FCC antitrust regulations. According to Bloomberg Intelligence, Sinclair and Tribune Media should be able to keep their combined market share low enough with a few divestitures. That includes about $2.7 billion in net debt. The announcement sent Tribune shares to $43.04 Monday on the New York Stock Exchange. Fried, Frank, Harris, Shriver & Jacobson LLP, Pillsbury Winthrop Shaw Pittman LLP and Thomas & Libowitz P.A. provided legal counsel.

Tribune Media Company (NYSE:TRCO) said that, Sinclair Broadcast Group will acquire Tribune Media in a deal valued at $3.9 billion.

Tribune Media Co has a 50 day moving average of 37.67 and a 200 day moving average of 34.59.

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