Aiming to appease regulators and accelerate the closing of its $3.9 purchase of Tribune Media, Sinclair Broadcast Group says it will sell 23 TV stations in 18 markets to six different buyers. The spinoffs add seven new markets to the original 11 the company had earmarked for sale back in February.
Tribune Media CEO Peter Kern said Sinclair’s latest move was intended to “pave the way for regulatory approval” of the blockbuster deal.
The buyers include Cunningham Broadcasting, Standard Media Group, Howard Stirk Holdings, Meredith Corp, a company affiliated with the CEO of Maryland-based Atlantic Automotive Corp. and a sixth party that hasn’t been announced.
“After a very robust divestiture process, with strong interest from many parties, we have achieved healthy multiples on the stations we are divesting,” Sinclair president and CEO Chris Ripley said in a statement. “While we continue to believe that we had a strong and supportable rationale for not having to divest stations, we are happy to announce this significant step forward in our plan to create a leading broadcast platform with local focus and national reach.”
The proposed sales, unveiled in an FCC filing on Tuesday, include stations currently owned by both companies. The larger number of spinoffs comes amidst renewed concerns about media consolidation prompted by the mega-merger. On Friday federal judges questioned why the FCC reinstated the so-called UHF discount, the rule that essentially paved the way for the combination. Judges at the U.S. Court of Appeals for the D.C. Circuit asked why the FCC reverted to an earlier method for counting UHF stations, which allows a broadcaster to count only half a station’s coverage area when calculating its ownership cap for stations above channel 14. The court is hearing a challenge against the FCC rule change brought by Free Press and other public interest groups.
“Importantly, the actions outlined in today’s filing are designed to bring our proposed merger into compliance with the FCC’s broadcast ownership rules and pave the way for regulatory approval,” Tribune Media CEO Peter Kern said in a memo to employees. “We’ve known for nearly a year that change was coming, but as I’ve said before, there is no reason to assume that this change won’t be for the better.”
Cunningham, owned by the estate of Carolyn Smith, the mother of Sinclair’s controlling shareholders, would buy stations in Dallas and Houston. Stirk would pick up stations in Seattle, Salt Lake City and Oklahoma City. Standard Media would buy stations in Oklahoma City, Harrisburg, PA and Richmond, VA. Meredith would pick up a station in St. Louis.
Sinclair earlier revealed plans to sell Chicago-market news-talk WGN (720) and sister WGN-TV to an investor affiliated with Atlantic Automotive Corp., with Sinclair retaining control of the stations’ operations under joint sales and shared services agreements.
The sixth, as yet unnamed buyer would purchase stations in Seattle, Miami, Denver, Cleveland and San Diego.
The company is hoping to close the deal – and the spinoffs – near the end of the second quarter.