Sinclair Broadcast Close to Purchasing Deal with Tribune Media

chicago tribune

Sinclair Broadcast is closer to a purchasing deal with Tribune Media than ever before.

Sinclair Broadcast Group Inc is inches away from a purchasing deal with Tribune Media Co. The price tag is expected to be somewhere near $4 billion. Sinclair was the author of strongest bid during an auction for one of the most influential television station operators in the United States.

Sinclair’s Purchasing Deal Was Possible Thanks to FCC’s Decision to Curb a 2016 Decision

The broadcast medium is up for big changes. It was only a few weeks ago when the U.S. Federal Communications Commission lifted a 2016 decision. Authorities believed this rule to impair the industry as it set a limit on the number of TV stations broadcasters were able to purchase. However, as this boundary faded away, major players are determined to consolidate their influence in their industry.

Ajit Pai received the President Donald Trump’s nomination as the head of FCC back in January. The official intends to reverse the rule that forbids companies from serving more than 39% of U.S. television households. By eliminating this condition, a successful purchasing deal between Sinclair and Tribune Media would surpass this cap by far. Moreover, such a merger would call for divestments.

Sinclair and Tribune Merger Would Create Unbeatable Broadcast Competitor

Sinclair and Tribune Media merger can create a competitor which would be far beyond the reach of the runner-up, namely Fox. This can happen as the two companies are going to own the largest part of Fox broadcast affiliates which would lend them more leverage during negotiations. As a counterattack, Peter Rice, the chairman of Fox Networks Group, stated that his company became interested too in a purchasing deal with Tribune Media. The chairman explained this approach as an attempt to gain more control over distribution.

Other interested parties in a merger with Tribune Media are Twenty-First Century Fox and Nexstar Media Group Inc. However, Sinclair’s bid might be too high to overcome. The company offered $44 per share which is a premium of 30% of Tribune Media shares on February 28. However, there is a chance that there will be no merger at all.

Image source: 1


Leave a Reply

Your email address will not be published. Required fields are marked *

shares