Sinclair, Tribune announce station sale plans
23 stations would go to 6 buyers in move for U.S. approval of merger
Sinclair Broadcast Group and Tribune Media announced plans Tuesday to sell 23 television stations after they merge as part of their campaign to get the deal approved by federal regulators.
The stations would be sold to six different buyers, including a Towson auto dealer and investor, Baltimore-based Cunningham Broadcasting Corp., Washington-based Howard Stirk Holdings, Iowa-based media giant Meredith Corp., a NewYork investment firm and another party yet to be announced.
Tuesday’s announcement revises and expands the number of stations that Hunt Valley-based Sinclair has proposed selling to secure approval for its $3.9 billion deal to buy Tribune Media. In March, Sinclair proposed shedding TV stations in 11 markets to allow the merged company to stay under federal ownership limits. It’s now planning to shed stations in 18 markets.
Without such sales, the Tribune Media acquisition, announced last May, would have given Sinclair control of 233 television stations, including 42 Tribune-owned stations and a presence in such top markets as New York and Chicago. (Tribune Media, formerly part of Tribune Co., once owned The Baltimore Sun and other newspapers, but spun them off in 2014.)
“We’ve always known Sinclair was going to have to sell some units to eliminate duplication and to not have monopoly power over more than 39 percent” of national TV viewership to comply with federal ownership rules, said Karryl Leggio, a finance professor at Loyola University Maryland.
She said it appears that Sinclair revised its original list of proposed sales based on feedback from the Federal Communications Commission, which must approve the deal.
The plan announced Tuesday does not include plans to sell a New York station to Cunningham, a company controlled by the estate of the Sinclair chairman’s mother. But it includes plans to sell several more smaller stations than originally proposed.
The proposed merger has run into strong opposition from those worried about the loss of diverse voices across the broadcast landscape, a concern heightened by Sinclair’s conservative leanings. Some critics also point to relationships between Sinclair and some of the intended buyers, including Cunningham and the Towson auto dealer.
Thecompanyhasdefendedthemergerasa necessity in a changing media landscape in which broadcasters nowface competition not just with one another but with online news and entertainment sources.
Sinclair said it expects the merger to close before the end of June, pending approval by the FCC and antitrust clearance by the U.S. Justice Department.
Under the plans announced Tuesday, Cunningham Broadcasting would acquire stations in Dallas and Houston rather than WPIX in New York.
Cunningham, which owns eight TV stations, including WNUV-TV in Baltimore, is owned by the estate of Carolyn C. Smith, the mother of Sinclair’s controlling shareholders, including David D. Smith, Sinclair’s executive chairman, and his three brothers.
As announced previously, WGN in Chicago would be sold to WGN-TV LLC, a company affiliated with Stephen Fader, the CEO of Towson-based Atlantic Automotive Corp., a holding company for MileOne Autogroup, a network of 40 auto dealerships in Maryland, Pennsylvania, Virginia and North Carolina. That sale was valued earlier at $60 million.
David Smith has a controlling interest in Atlantic Automotive and serves as a member of its board, Sinclair’s proxy statement shows. Atlantic is also a Sinclair advertiser and tenant.
The terms of none of the deals were disclosed, but Sinclair would provide sales and other services to WGN and the stations acquired by Howard Stirk.