If there is a book on M&As in the media industry, at least one chapter needs to be allotted to the Sinclair-Tribune merger.
Recognized as one of the most diversified local TV station operators, Sinclair had showed its interest in acquiring Tribune Media that owns close to 42 TV stations. The mega deal worth $3.9 billion was announced last year in May, but the trek ahead wasn’t easy as expected.
Currently, the merger is awaiting a clearance from the Federal Communications Commission (FCC) and the Department of Justice. If this deal gets a nod from the regulators, Sinclair, which owns over 173 broadcast stations, will dominate in 70% of the American households beating other (major) players like 21ST Century Fox and Texas-based Nexstar.
If this deal gets a nod from the regulators, Sinclair, which owns over 173 broadcast stations, will dominate in 70% of the American households
The review of this merger has been so far delayed by the FCC. And it has now demanded that Sinclair sell a handful of its assets so that it meets the ownership guidelines. Even before the deal, Sinclair owned 6% more TV stations than what was stipulated by the authorities. Succumbing to this pressure, Sinclair has agreed to sell its TV stations in New York and Chicago. The company has also decided to divest some of its businesses in smaller markets including Seattle and St. Louis. Surprisingly, Sinclair made these announcements without having a suitable buyer for WPIX in New York and WGN in Chicago.
Enter Murdoch
Apparently, Rupert Mudroch 21st Century Fox has been eyeing the TV stations that are currently owned by Tribune Media. And, it is heard that Fox is in talks with Sinclair. This decision makes sense as Mudroch’s company is in talks with Walt Disney as it plans to unload parts of its media company. The Murdochs are more likely to shift their focus on the broadcast network. This gives Sinclair a larger control on the broadcast distribution over 21st Century Fox. Hence it wouldn’t be surprising to see Fox scooping those TV stations that Sinclair unloads, but it is less likely to take those stations functioning in smaller markets.