Unique: Sinclair approaches Tribune Media about potential deal

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By Jessica Toonkel and Liana B. Baker

Sinclair Broadcast Group Inc has approached rival U.S. broadcaster Tribune Media Co to debate a possible mixture, folks acquainted with the matter mentioned on Wednesday, a deal that might hinge on present laws being relaxed.

A deal between Sinclair and Tribune Media, which have market capitalizations of $three.6 billion and $three billion respectively, would mix two of the most important U.S. native TV station homeowners and face regulatory curbs on what number of households they’ll attain.

Nonetheless, the published trade hopes President Donald Trump will carry caps on possession focus, permitting it to compete for audiences and advertisers in opposition to Fb Inc and Alphabet Inc’s Google.

The discussions between the businesses are preliminary and there’s no certainty they are going to result in any deal, the folks mentioned.

Sinclair might additionally take a look at shopping for components of Tribune such because the dozen CW broadcast stations it owns, or its media holdings such because the WGN America cable community and its stake within the Meals Community, the folks added.

The sources requested to not be recognized as a result of the matter is confidential. Tribune Media declined to remark, whereas Sinclair didn’t reply to a request for remark.

An acquisition of Tribune would come because the Chicago-based firm faces greater programming prices and a difficult promoting setting.

Tribune’s chief government, Peter Liguori, has mentioned he’s stepping down this month, and the corporate has but to call a everlasting alternative. In February, Starboard Worth LP, an activist hedge fund recognized for calling on corporations to vary their technique, disclosed a 6.6 p.c stake within the firm.

Sinclair branched out into cable networks final 12 months when it purchased the Tennis Channel for $350 million.

If the businesses determine to mix, they might collectively attain extra folks than the U.S. Federal Communications Fee (FCC) at present permits for. Except grandfathered in, no broadcast group is allowed to succeed in greater than 39 p.c of U.S. households.

Nonetheless, Congress has elevated the cap earlier than, and lots of within the trade anticipate Trump to loosen up the foundations on the possession of broadcast stations. Sinclair and Tribune might additionally search a waiver to go above the cap as a part of a deal, the sources mentioned.

Tribune is already above the FCC cap, reaching 44 p.c of U.S. households, whereas Sinclair is at 38 p.c, in keeping with Jefferies LLC analyst John Janedis.

Tribune Media mentioned final 12 months that it was working with monetary advisers, Moelis & Co and Guggenheim Securities, on a strategic assessment. It subsequently bought its media knowledge unit Gracenote to Nielsen Holdings Plc for $560 million.

Tribune is because of report earnings afterward Wednesday.

(Reporting By Jessica Toonkel in New York and Liana B. Baker in San Francisco; Enhancing by Stephen Coates)