Fox Broadcasting Co. will buy some of the 23 television channels of the Sinclair Broadcast Group, which the broadcaster wants to sell, to receive US $ 3.9 billion approval from the US Tribune Media.
Fox is buying seven channels for $ 1.5 billion, plus another $ 100 million in working capital, Sinclair said in Hunt Valley on Wednesday. The deal with Fox does not include any stations where Sinclair will continue to provide services after the transaction is completed.
The news sent Sinclair's shares higher, with shares closing down 9.3 percent on Wednesday at $ 29.85.
Fox joins other previously announced buyers from Tribune and Sinclair stations, including Standard Media Group LLC, a subsidiary of Standard General; Meredith Corp.; Howard Stirk; and Cunningham Broadcasting Corp.
Sinclair said Wednesday that the Tribune business will come to an end at the end of the second quarter or at the beginning of the third quarter.
"After a very robust divestment process with strong interest from many parties, we have a healthy multiple at the gas station to be divested," said Chris Ripley, President and CEO of Sinclair, in the company's announcement.
In a conference call with analysts, Ripley said that selling Fox means Sinclair is nearing closure. The agreement requires approval from the Federal Communications Commission and the US Department of Justice.
Sinclair also announced Wednesday that its first-quarter earnings had dropped. The decline was due to weaker advertising revenues compared to the first three months of the year, when the Olympics and Super Bowl were broadcast on many Sinclair stations, and a decline in car advertising from last year's highs.
The company reported revenue of $ 43.1 million, or 42 cents per share, for the three months ended March 31, equivalent to a profit of $ 57.2 million, or 61 cents per share, in the first quarter of 2017. Sales rose more than 6 percent to $ 665.4 million from $ 626.9 million in the first quarter of 2017.
On W After the ednesday conference call, Ripley announced that the company had announced its distribution revenues. These include retransmission fees – or the fees paid by cable and satellite TV providers Sinclair to include its broadcasters in broadcaster lineups, affiliate fees, and subscription revenues. That's 45 to 50 percent of Sinclair Media's revenue, Ripley said.
"At a time of increasing audience fragmentation and uncertainty about the economy, investors should seek solace as nearly half of our income is protected from advertising proletivity." Ripley said.
Despite planned station sales, Ripley said the company believes it would not have needed to sell them as part of the grandstand business. Excluding sales, the acquisition of Tribune Media, which was announced last May, would have given Sinclair control over 233 television channels, including 42 Tribune-owned broadcasters and presence in top markets such as New York and Chicago. (Tribune Media, formerly part of Tribune Co., once belonged to the Baltimore Sun and other newspapers, but turned it down in 2014.)
The proposed merger has been advised in strong opposition by those concerned about the loss of various voices in The US was doing broadcasting, a concern reinforced by Sinclair's conservative leanings. Some critics also refer to past relationships between Sinclair and some of its intended buyers, including Cunningham and a Towson investor who is the chief executive of the MileOne car dealer group.
The company has argued that it needs this reach to compete better with other online sources of news and entertainment
Ripley said Wednesday The merger will "create a leading broadcast platform with local focus and national reach" and position the broadcaster for changes as part of a new broadcast transmission standard known as Next Generation Broadcast. 19659002] Following the merger and sale of 23 broadcasters, Sinclair broadcasters will reach 62 percent of US television households and fall under the ownership restriction of federal television coverage of 39 percent, the company said [S] + Inclair said it also has extension agreements Fox Street has reached Affiliates for 34, including all eight Tribune's Fox Affiliates who are not sold to Fox Broadcasting.
"We see the Fox renewal and station sales as a good step forward An element of uncertainty for this [Tribune] transaction," said Marci Ryvicker, senior analyst at Wells Fargo Securities, in a report on Wednesday morning.
Free Press, which is opposed to the Tribune Agreement, said Wednesday the merger and the sale to Fox were made possible by the efforts of FCC chairman Ajit Pai, a Trump envoy, to push the boundaries of broadcasting To exceed.
The organization has filed a petition with the Common Cause, Media Mobilizing Project and the National Hispanic Media Coalition for a DC Court of Appeals to overturn last year's FCC decision, the so-called "UHF rebate". The discount allows broadcasters to broadcast on these higher-frequency frequencies only half of their viewers against a cap that allows the stations of a single owner to reach no more than 39 percent of the country's television household.
"Sinclair's plan to sell seven stations to Fox as part of his grandstand takeover shows everything that is wrong with the media landscape," said Craig Aaron, President and CEO of Free Press in a statement. "At a time when our communities are demanding local coverage and independent voices, television stations are being devoured by a few huge conglomerates."