FCC clears up merger static
The FCC reinstated the “UHF discount” on Thursday — a move that makes Sinclair Broadcast Group’s expected bid for Tribune Media more compelling.
The discount allows owners of a TV station with a weaker UHF signal to count only 50 percent of potential audience whendetermining it reach.
Federal regulations cap any station group’s reach at 39 percent of the country.
Withthe UHFdiscount, Sinclair’s 173 stations cover 24 percent of the USandTribune’s42 stations cover 26 percent, according to a calculation by Bloomberg, which this week reported Sinclair is close to of- fering a per share price in the high-$30s for Tribune.
Withthelowercoverage formula, a deal could be accomplished with a reasonable number of stations sold off.
“For Sinclair to have done a deal without the UHFdiscount wouldn’t make sense, considering it was so near the cap,” said Wedbush analyst James Dix. “Thedivestitures it would have had to do to comply with national footprint rules would have been prohibitive.”
Tribune didn’t comment on a deal but issued a statement praising the FCCfor the move.
After the vote, Tribune shares eased 29cents, to $38.12, and Sinclair shares slipped 5 cents, to $40.35.