FCC clears up merger static

New York Post - - BUSINESS - By RICHARD MOR­GAN rmor­gan@ny­post.com

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.

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