Sinclair CEO Admits Tribune Merger May ‘Just Expire’

Sinclair CEO Admits Tribune Merger May 'Just Expire'

Sinclair Broadcast Group CEO Chris Ripley admits the company’s planned takeover of Tribune Media could “just expire” amid a lawsuit against the Federal Communications Commission filed in March by a consortium of consumer groups and unions.

While Sinclair (SBGI) needs approval from the FCC and Justice Department antitrust authorities to complete the $3.9 billion purchase it proposed in May 2017, the fate of the takeover likely rests with a three-judge panel at the U.S. Court of Appeals for the D.C. Circuit.

The suit charges the FCC with favoring Sinclair as it has stripped away regulation limiting media ownership. 

“We firmly believe the likely outcome here is that the FCC wins,” Ripley said during a recent conference call to discuss Sinclair’s first-quarter results, reported.

“If, by some scenario, they don’t and we have not been approved by then, we can either wait and see if there’s an appeal or some sort of FCC action” on station ownership rules, Ripley was quoted as saying.

“The other scenario is that the deal would just expire and I would just remind everyone that Sinclair does not have a break-up fee in that scenario,” Ripley was quoted as saying.

Meanwhile, Wall Street is betting against Sinclair’s planned takeover of Tribune Media (TRCO), Fox Business Network’s Charlie Gasparino said.

“The betting on Wall Street is against this happening,” Gasparino said, explaining that even though the issue has to be approved by both the Federal Communications Commission and Department of Justice, it is the D.C. Circuit Court that could hold sway.

For its part, Sinclair on Wednesday said it will sell seven TV stations to Fox Broadcasting Co. as part of its divestiture plan to appease regulators concerned about competition in local TV markets, Bloomberg reported.

The seven stations being sold, in markets such as Miami and Seattle, are part of a batch of 23 stations identified for sale last month by the Maryland-based broadcaster.

The Justice Department is “wrapping up” its vetting of station buyers, and Sinclair wants to move on to FCC approval “very shortly,” Ripley told investors. Ripley said he expects a 30-day comment period from the FCC. “Now that we have completed Fox, we are going to back in front of the FCC,” Ripley said. He said that would trigger a 30-day review period.

Sinclair, which already is the biggest owner of TV stations in the United States, needs the FCC and Justice Department approval for a deal that will give it a massive reach into 72 percent of American homes.

The FCC rule change – reinstituting an old definition that applied to UHF signal reach decades ago – was made just weeks before the Sinclair merger announcement.

The court should decide before the end of September on the UHF discount matter.

(Newsmax wire services contributed to this report).

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Author: HEDGE

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