Sinclair, Tribune Close to Merger Deal

[The Frog 393]

First whats with all the partisan hackery in this thread?

 

There's a lot of it all over the forum nowadays...it feels like the fun has been sucked out of this place.

 

mardek1995, I take it all back! Please stay forever!

[Rusty Muck 4167]

This would be a good time for Hearst and similar companies to start acquiring more stations in markets Sinclair is in or will be in, wouldn't it?

Hearst plays by the rules. Sinclair openly revels in breaking the rules or gaming the system to favor them.

[Darius22 120]

I got a feeling that KTXL might get a 40.5. then again that's probably 3 sub-channels too many. i'm referring to Sinclair's OTA sub-channels, Comet and Charge even though both channels are being offered Live on their websites.

[DonDonP1 113]

I would love to see Hearst in the Grand Rapids/Kalamazoo MI market

 

Hello. As for me: I would love to see a Fox O&O and a My Network TV O&O--owned and operated--here in the Greater Seattle Area, my home since the summer of 1998. Seattle's got one network-owned TV station: KSTW CW 11, owned and operated by the CBS Corporation.

[ColtFromGulfcoast 695]

mardek1995, I take it all back! Please stay forever!

 

Careful what you wish for.

[mre29 1340]

Hearst plays by the rules. Sinclair openly revels in breaking the rules or gaming the system to favor them.

 

That doesn't mean Hearst can't start making acquisitions.

[MichiganNewsGraphicsJunkie 748]

I think Hearst would do very well in the Grand Rapids/Kalamazoo DMA and other decently large DMA's -- There's no need for Sinclair duopolies in larger markets...

[GoldenShine9 1509]

I think Hearst would do very well in the Grand Rapids/Kalamazoo DMA and other decently large DMA's -- There's no need for Sinclair duopolies in larger markets...

 

Hearst might find a better opportunity awaits if Nexstar and Tegna merge. The Grand Rapids/Kalamazoo DMA is the only one that would be affected by both that rumored deal AND this one.

[Megatron81 181]

I think Hearst would do very well in the Grand Rapids/Kalamazoo DMA and other decently large DMA's -- There's no need for Sinclair duopolies in larger markets...

 

I didn't know this until about few weeks ago Hearst owned WZZM for 1 hot minute before selling it to TEGNA. I would put Hearst would buy Fox17 but they don't own any Fox stations which surprised me I see them buying WZZM again if Nexstar & TEGNA merger happens.

[tyrannical bastard 3467]

Broadcasting and Media companies have had their dark secrets over the years....

 

James Harrison Gray (founder of Gray Communications) was a known segregationist. He only owned WALB and WJHG at the time (he later owned KTVE). Years after his passing, Gray began amassing stations and grew into the small market juggernaut it is today.

 

Jesse Helms was a VP and commentator on WRAL, one of the most revered stations in the country. Before his career in the senate, he would say things in his commentaries that would make Mark Hyman and Boris Ephsteyn look tame. At the time, the locals ate it up and WRAL later became a technical leader and a beacon of quality broadcasting.

 

And then there was WLBT, losing their broadcast license by openly advocating white supremacy and outright denying the existence of African-Americans, pre-empting programming either by "accident" or willingly. The FCC stripped their license and a bi-racial company was awarded a new license as "Communications Improvement". WLBT then grew into the number one station in Jackson.

 

And even in Birmingham , CBS was dumped to a little itty-bitty upstart known as WBMG at the time. And WBRC, the then-Taft owned ABC station catered to the locals since CBS was too "friendly" to the Civil Rights Movement.

 

What is my point you ask?

 

These instances have come and gone, and aside from WLBT losing their license, they've peddled their views with little controversy and lasting stigma, and have changed with the times to become more "balanced" news sources. Other than WRAL, both WLBT and WBRC became a part of Raycom, which unlike Sinclair, encourages relevant, local commentary and openly gives the chance for rebuttal or editorial replies.

 

Now we have Sinclair trying to take over by forcing their must-run content on viewers, and becoming pawns of the FCC and administration to do their bidding. And unlike the other companies who have changed hands and CEOs, the Smith Family has had their iron grip the whole time.

 

It's a start that they have a new CEO, but it may be many, many years until there is a change in leadership that drops this point of view, but I think at this rate, the house of cards is going to collapse even before that becomes a reality. They've grown so big that no one can save them whole.

[Rusty Muck 4167]

That doesn't mean Hearst can't start making acquisitions.

If that were the case, they would have done so a long time ago. Outside of a small station here and there, they haven't, and won't.

 

Hello. As for me: I would love to see a Fox O&O and a My Network TV O&O--owned and operated--here in the Greater Seattle Area, my home since the summer of 1998. Seattle's got one network-owned TV station: KSTW CW 11, owned and operated by the CBS Corporation.

Uh huh. Watch as KCPQ's intellectual property is moved to a KOMO sub, KCPQ's license is sold to Howard Stirik for pennies on the dollar, and KZJO gets the ol' failing station waiver.

 

Sinclair will game the system so they will keep as many stations as they want. And there's nothing you can do about it.

[bobvick 9]

Broadcasting and Media companies have had their dark secrets over the years....

 

And even in Birmingham , CBS was dumped to a little itty-bitty upstart known as WBMG at the time. And WBRC, the then-Taft owned ABC station catered to the locals since CBS was too "friendly" to the Civil Rights Movement.

While I don't disagree that there may be a kernel of truth to that statement about CBS in Birmingham, to be fair, it should also be pointed out that Taft had close relations with ABC. The chairman of Taft was a personal friend of ABC's president at the time, and many of Taft's other stations, including the flagship WKRC, had recently switched to ABC. Also, ABC aired Hannah-Barbera cartoons later in the 1970's, Taft was the parent of Hannah-Barbera at that time, and Taft purchased ABC's former syndication arm in 1979. So, in summary, Taft and ABC were close to say the least in that period of time, which was also a factor in WBRC being a stand alone ABC affiliate.

[NEOMatrix 1295]

If that were the case, they would have done so a long time ago. Outside of a small station here and there, they haven't, and won't.

 

 

Uh huh. Watch as KCPQ's intellectual property is moved to a KOMO sub, KCPQ's license is sold to Howard Stirik for pennies on the dollar, and KZJO gets the ol' failing station waiver.

 

Sinclair will game the system so they will keep as many stations as they want. And there's nothing you can do about it.

Don't forget, Fox wants a NFC station. For all we know, this might be the only divestiture that Sinclair might do in order to keep the Fox gods happy.

[SteveKendall 30]

While I don't disagree that there may be a kernel of truth to that statement about CBS in Birmingham, to be fair, it should also be pointed out that Taft had close relations with ABC. The chairman of Taft was a personal friend of ABC's president at the time, and many of Taft's other stations, including the flagship WKRC, had recently switched to ABC. Also, ABC aired Hannah-Barbera cartoons later in the 1970's, Taft was the parent of Hannah-Barbera at that time, and Taft purchased ABC's former syndication arm in 1979. So, in summary, Taft and ABC were close to say the least in that period of time, which was also a factor in WBRC being a stand alone ABC affiliate.

 

I've read online snippets of a book by Lawrence Rodgers, a now-deceased former CEO of Taft. Rodgers claims that Taft's switch of its stations to ABC was pretty much all about increased compensation, coupled with CBS becoming difficult to work with. According to Rodgers, Taft's CBS affiliation agreements were boilerplate, with WKYT not even allowed to carry the full CBS schedule due to sponsorship issues having to do with the station's overlap with other CBS affiliates (including WKRC). Rodgers also claims that CBS issued an edict to the Taft stations stating that if the stations didn't clear the entire CBS daytime schedule in pattern, the stations would not receive compensation for carrying any of the network's daytime shows. This meant WKYT would get zilch, due to it not being allowed to carry the full CBS daytime schedule to begin with. Rodgers stated how much more compensation ABC offered compared to CBS...I can't remember the amount, but it was a significant difference.

 

ABC was apparently willing to pay up to get a full-time affiliate in Birmingham, and to get off of WCPO in Cincinnati, which was preempting ABC shows left and right. In addition, WKYT would be allowed to carry ABC's full schedule.

[mre29 1340]

It's a start that they have a new CEO, but it may be many, many years until there is a change in leadership that drops this point of view, but I think at this rate, the house of cards is going to collapse even before that becomes a reality. They've grown so big that no one can save them whole.

 

That brings up a good question: Has Sinclair become too big to fail? Will they need to be bailed out like the banks and car manufacturers?

[CircleSeven 1944]

That brings up a good question: Has Sinclair become too big to fail? Will they need to be bailed out like the banks and car manufacturers?

 

If they're not already that that point, should this deal be greenlighted, they'll most definitely will be.

 

From their earnings call of their Q2 results this morning, Sinclair is still confident that they can close this deal by the end of the year, but would be surprised if it spills into January of next year.

Ripley discussed Sinclair’s 2017 headline event. “The expected acquisition of Tribune will transform our company on many levels. In particular, it gives us access to top 10 markets and establishes a nationwide platform to which to deploy advanced services.”

 

“For the consumer,” Ripley continued “the acquisition will represent increased content choices and better local programming. For our shareholders, this would be an accretive transaction with over 40% free cash flow per share growth.”

 

Ripley said there is no reason to believe the Tribune deal won’t close by the end of the year, and expressed no concern if the closing slips into January 2018. He said the FCC’s review thus far has been “constructive.”

 

Ripley told a questioner that he is unconvinced that required spin-offs needed to be attached to the transaction. “You can make a very, very strong case that nothing needs to be sold,” he said, “but we did agree to sell to the extent that we needed to so that’s why there’s a process that we may launch in anticipation of that.”

 

Wells Fargo Securities analyst Marci Ryvicker noted that the possible advent of relaxed FCC ownership rules between now and the closing of the deal may reduce the number of stations Sinclair will have to sell to remain in compliance with FCC rules.

They do have alot of time to close the deal. August 8, 2018 is the termination date of which both parties can terminate the deal without Tribune paying Sinclair a breakup fee. Actually, the initial end date is May 8th, 2018 (one year after the merger announcement). But if they don't receive the greenlight by DOJ/FCC by that time, then they'll extend it by three months to August 8th. But they have to get the shareholder approval by the May 8th date. Sinclair better deal with those shareholders who are suing them right now.

 

From the merger agreement (p.95-96 on PDF):

ARTICLE IX

TERMINATION

Section 9.1 Termination. This Agreement may be terminated at any time prior to the Effective Time (except as otherwise stated below):

(a) by mutual written consent of the Company and Parent;

 

(b) by either the Company or Parent:

(i) if the Effective Time shall not have occurred on or before May 8, 2018 (the “Initial End Date”); provided, that if on the Initial End Date any of the conditions set forth in Section 8.1(b) shall not have been satisfied but all other conditions set forth in Article VIII shall have been satisfied or waived or shall then be capable of being satisfied, then the Initial End Date shall be automatically extended to August 8, 2018 (the “Second End Date”). As used in this Agreement, the term “End Date” shall mean the Initial End Date, unless extended pursuant to the foregoing sentence, in which case, the term “End Date” shall mean the Second End Date. Notwithstanding the foregoing, the right to terminate this Agreement under this Section 9.1(b)(i) shall not be available to a Party if the failure of the Effective Time to occur before the End Date was primarily due to such Party’s breach of any of its obligations under this Agreement;

 

But once again, they're banking hard on Pai to change the rules (and as of now, there haven't been any indication of possible rule changes yet), and an approval of any rule changes will end up being challenged in court by those advocacy groups (Free Press, et. all), just like the reinstatement of the UHF loophole. Sinclair better hope that the UHF loophole case in the DC Circuit doesn't go forward before they get the greenlight.

[GoldenShine9 1509]

If they're not already that that point, should this deal be greenlighted, they'll most definitely will be.

 

From their earnings call of their Q2 results this morning, Sinclair is still confident that they can close this deal by the end of the year, but would be surprised if it spills into January of next year.

 

They do have alot of time to close the deal. August 8, 2018 is the termination date of which both parties can terminate the deal without Tribune paying Sinclair a breakup fee. Actually, the initial end date is May 8th, 2018 (one year after the merger announcement). But if they don't receive the greenlight by DOJ/FCC by that time, then they'll extend it by three months to August 8th. But they have to get the shareholder approval by the May 8th date. Sinclair better deal with those shareholders who are suing them right now.

 

From the merger agreement (p.95-96 on PDF):

 

 

But once again, they're banking hard on Pai to change the rules (and as of now, there haven't been any indication of possible rule changes yet), and an approval of any rule changes will end up being challenged in court by those advocacy groups (Free Press, et. all), just like the reinstatement of the UHF loophole. Sinclair better hope that the UHF loophole case in the DC Circuit doesn't go forward before they get the greenlight.

 

Even if there are rule changes, they still have to get through the dysfunctional Congress, and that could take many months as well. The House should be easy, but I have a hard time seeing it get through the Senate where only 3 Republicans need to cross over - and there are several I could see that could throw Pai a pie in the face...

 

I see NO WAY how this can be completed even by Q1 2018 without major divestitures to stay within the current laws. Q2 2018 might be possible if the votes go their way, but if not then they are out of luck.

 

Fortunately for Sinclair, the proposed legislation that would make the deal essentially DOA has zero chance of going anywhere. Also luckily, the scale of this is probably too big for anyone to fly in with an alternative offer, like when Nexstar grabbed Media General after trying to deal with Meredith...(even though in retrospect that was a terrible deal as it involved publishing assets + so many conflicts given the size of the company).

[Eat News 4738]

That brings up a good question: Has Sinclair become too big to fail? Will they need to be bailed out like the banks and car manufacturers?

 

They will not be bailed out because they are not an industry vital to operations of the country.

 

Sinclair has the right to fail or file BK just like every other business does.

[ThatSowislander 52]

Can be moved or separated to a more appropriate topic, but Fox and Ion are in talks to take over ION's stations, and move its affiliations there, just in case things with Sinclair go sour. Fox's deal with Sinclair are up for renewal this year.

https://www.bloomberg.com/news/articles/2017-08-02/fox-is-said-in-talks-with-ion-media-to-operate-local-tv-stations?cmpid=socialflow-twitter-business&utm_content=business&utm_campaign=socialflow-organic&utm_source=twitter&utm_medium=social

[GoldenShine9 1509]

Can be moved or separated to a more appropriate topic, but Fox and Ion are in talks to take over ION's stations, and move its affiliations there, just in case things with Sinclair go sour. Fox's deal with Sinclair are up for renewal this year.

https://www.bloomberg.com/news/articles/2017-08-02/fox-is-said-in-talks-with-ion-media-to-operate-local-tv-stations?cmpid=socialflow-twitter-business&utm_content=business&utm_campaign=socialflow-organic&utm_source=twitter&utm_medium=social

 

That sounds like a last resort, a desperation move. In most of those markets (a topic for the Speculatron), there is a better option open for Fox by going onto a DT2 of a strong station in the market or a current CW or MNTV station that is not owned by Sinclair.

[GoldenShine9 1509]

And yet, all Sinclair likely has to do to please Fox? Give them the KCPQ/KZJO duopoly that Fox has wanted for years.

 

But it appears that Sinclair is doing their best to napalm a relationship with one of their more beneficial partners.

 

I'm curious to see how the other major networks are handling this. Sinclair is #3 for ABC reach (behind Scripps and Hearst), #4 for CBS reach (behind Tegna, Nexstar and Meredith) and #4 for NBC reach (behind Tegna, Nexstar and Hearst) as well I believe. Of course, they are a runaway #1 (already) for Fox affiliates, and will be leaps and bounds above anyone else after this.

[elfuego35 89]

And yet, all Sinclair likely has to do to please Fox? Give them the KCPQ/KZJO duopoly that Fox has wanted for years.

 

But it appears that Sinclair is doing their best to napalm a relationship with one of their more beneficial partners.

 

(Note: This is a repost)

[Rusty Muck 4167]

While I don't disagree that there may be a kernel of truth to that statement about CBS in Birmingham, to be fair, it should also be pointed out that Taft had close relations with ABC. The chairman of Taft was a personal friend of ABC's president at the time, and many of Taft's other stations, including the flagship WKRC, had recently switched to ABC. Also, ABC aired Hannah-Barbera cartoons later in the 1970's, Taft was the parent of Hannah-Barbera at that time, and Taft purchased ABC's former syndication arm in 1979. So, in summary, Taft and ABC were close to say the least in that period of time, which was also a factor in WBRC being a stand alone ABC affiliate.

That being said, ABC's news operation was much weaker than NBC and CBS until Roone Arledge came in.

 

CBS - who was the more aggressive in coverage of the civil rights movement - was consigned to a weak UHF signal that was a total non-player in the market until the 2000s. That was definitely a "happy coincidence" CBS was forced to go along with.

[Rusty Muck 4167]

That sounds like a last resort, a desperation move. In most of those markets (a topic for the Speculatron), there is a better option open for Fox by going onto a DT2 of a strong station in the market or a current CW or MNTV station that is not owned by Sinclair.

They did it in Charlotte. NBC's doing the same in Boston.

 

And Fox can absolutely use the threat of moving their affiliation from, say ... WJW ... over to WVPX-23. Which has full-market cable coverage.

 

If Paid Off does away with the Main Studio Rule, though, all bets are off.

[GoldenShine9 1509]

They did it in Charlotte.

 

And Fox can absolutely use the threat of moving their affiliation from, say ... WJW ... over to WVPX-23. Which has full-market cable coverage.

 

If Paid Off does away with the Main Studio Rule, though, all bets are off.

 

I would think WUAB would be a better choice for Fox in Cleveland, since they have good relations with Raycom.