Sinclair close to Tribune Media deal

Carla Harmon
May 17, 2017

By having such a big reach, Sinclair would have tremendous leverage when it makes deals to acquire content for its television stations, industry observers say.

Tribune Media is the former parent company of the Los Angeles Times and Chicago Tribune which were spun off into a new company - now named Tronc Inc. - along with Tribune's other publishing properties in 2014.

"We will be the largest broadcast group by a country mile", Sinclair Broadcast Group Chief Executive Chris Ripley told analysts Monday. But higher programming costs have squeezed Tribune's profit margin, said Bloomberg.

Shares of Tribune rose as high as $43.80 in early NY trading Monday before the announcement. The size and scope of the transaction promises to bring a heavy level of scrutiny on the deal, from regulators and media watchdog groups.

The purchase will bring together America's largest TV network, Sinclair Broadcast Group, which beat 21st Century Fox to land the deal.

Tribune also has stakes in the TV Food Network and CareerBuilding as well as a variety of real estate assets.

The Tribune deal will give Sinclair a footprint in almost all of the country's major markets, about a third of the nation's households. Change-of-control approvals are standard in affiliation agreements, and they're normally not sought until after takeovers are announced, the people said.

Reuters reported on Sunday that the deal was pending.

Tribune Media shares ended trading on Friday at $40.29, giving it a market capitalization of $3.5 billion.

Tribune stockholders will get $35.00 in cash and 0.23 shares of Sinclair Class A common stock for each share of Tribune Class A common stock and Class B common stock owned. The company fired Leiberman the day after his interview, saying he was a disgruntled employee.

There has also been speculation that Sinclair, with the addition of Tribune's portfolio, could try to launch a rival to Fox News, though the company has not commented on the possibility.

Sinclair, which runs or services 173 television stations over 80 markets, has market capitalization is estimated to be $3.36 billion.

The FCC has yet to approve the deal, but Sinclair is expecting an eventual approval by the end of 2017. With the acquisition, Sinclair will have ownership or control of television stations in 72 percent of US markets, including in major markets such as New York, Chicago and Miami, as well as 28 percent of Fox Broadcasting's affiliates.

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