While Comcast (CMCSA) and Walt Disney (DIS) continue their fight for the film and TV studios of 21st Century Fox (FOXA), the Rupert Murdoch’s firm is looking elsewhere to revamp its depleting asset base. After selling the majority of its business to Disney last year, Fox is left with no other option but to focus more on local TV.
The New York-based media corporation has agreed to buy seven TV stations from Sinclair Broadcast (SBGI) for about $910 million, expanding the reach of its network to nearly half of the American households. For Fox, the deal is also a doorway to the lucrative National Football League markets in the US.
Speculations of a deal with Sinclair were rife ever since Fox agreed to sell its cable assets and studio to Disney. To rev up its finances, Fox bets on the thriving markets currently being served by the Sinclair channels – in Seattle, Miami, Denver, Cleveland, San Diego, Sacramento and Salt Lake City.
Fox has agreed to buy seven TV stations from Sinclair Broadcast for about $910 million, expanding the reach of its network
Most importantly, the deal gives Fox access to 19 of the 20 leading television markets in the country. It was the company’s long-time agenda to gain control of the key markets where the lion’s share of its distribution was handled by Sinclair.
It is learned that by divesting the TV stations Sinclair would become eligible for the regulatory approval required for its $4-billion acquisition of Chicago-based Tribune Media (TRCO). That perfectly syncs with Fox’s strategy to shift its focus to local TV, making it a win-win deal.
“This transaction illustrates Fox’s commitment to local broadcasting and we are pleased to add these stations to our existing portfolio. This expansion will further enrich our valuable alignments with the NFL, including our new Thursday Night Football rights, MLB and college sports assets,” said Fox Television Stations CEO Jack Abernethy.
Meanwhile, the asset sale indicates Sinclair is on track to close the acquisition of Tribune by year-end, as expected. Ever since the companies signed the agreement a year ago, several regulatory hassles popped up, requiring them to engage in a series of negotiations with the agencies concerned.
21st Century Fox reported its third quarter results after the bell today. Earnings increased 7.4% year-over-year to $858 million or $0.47 per share while revenue dropped 2% to $7.42 billion.