Sinclair Broadcast Group to buy Tribune Media for $3.9 bn

The largest US broadcaster, Sinclair Broadcast Group Inc, yesterday struck a deal to buy Tribune Media Co in a $3.9-billion cash and stock deal, outbidding Twenty-First Century Fox and Nexstar Media Group Inc.

Sinclair has offered to pay a total of $43.50 per share, a 26-per cent premium over Tribune's closing price on 28 February, a day before media reports speculated about a potential acquisition.
Under the deal, Tribune stockholders will receive $35 in cash and 0.23 share of Sinclair stock for each Tribune share and assume about $2.7 billion debt.

The deal comes a month after the US Federal Communications Commission (FCC) voted to reverse a 2016 decision on limiting the number of television stations some broadcasters can buy, but cannot cover more than 39 per cent of US household.

This change has led to US media companies trying to consolidate the country's TV station groups

Sinclair may still have to sell some stations like St. Louis and Salt Lake City in order to comply with FCC regulations, according to analysts.

But FCC Commissioner Michael Copps voiced his disapproval of the deal, ''Sinclair's acquisition of Tribune Broadcasting is expected and disappointing. Expected because the new FCC majority is foaming at the mouth to rubber-stamp more massive media mergers; and disappointing because Sinclair is not known for the best journalism in the land, to put it mildly. Our nation's civic dialogue suffers yet another blow with this merger.''

The Tribune deal will give Sinclair a footprint in nearly all of the country's major markets, about a third of the nation's households.

Tribune Media was created in 2014 when the Tribune company split its iconic broadcasting and publishing businesses into two separate companies – one called Tribune Publishing and the other Tribune Media. (See: Tribune to split broadcasting and publishing into two companies)

New York-based Tribune's broadcasting business includes 42 local television stations in 33 markets, WGN Radio, superstation WGN America, Tribune Studios, Tribune Digital Ventures, Tribune Media Services, its equity interests in Classified Ventures, CareerBuilder, and The TV Food Network, and its valuable portfolio of real estate assets.

WGN America reaches approximately 80 million US households, while Tribune Broadcasting reaches over 50 million households in the US.

Tribune, which has a market cap of around $3.2 billion, attracts 60 million monthly unique visitors to Tribune Broadcasting's local websites and apps, according to internal data and Google analytics.

Founded in 1986, Sinclair is one of the largest and most diversified television broadcasting companies in the country operating 173 stations in 81 small and medium-sized markets including Baltimore, Maryland, Wichita, Kansas and Salt Lake City, Utah.

Sinclair owns and operates programs or provides sales services to more television stations than anyone and has affiliations with all the major networks.

In addition, Sinclair is the leading local news provider in the country, as well as a producer of sports content. It owns a multicast network, four radio stations and a cable network.

Sinclair's broadcast content is delivered via multiple-platforms, including over-the-air, multi-channel video program distributors, and digital platforms.