Sinclair Broadcast Group Inc. is considering selling certain TV stations for as much as $1 billion in a bid to receive the Federal Communications Commission's approval of its proposed acquisition of Tribune Media Co., Bloomberg News reported Oct. 17, citing "people familiar with the matter."
The company has reportedly received preliminary bids for up to 10 TV stations and could sell all or some of them in different markets. However, the sales may not materialize soon due to a possibility of an alteration of the rules regarding limited media ownership and how antitrust laws will be enforced under the current administration. The broadcaster may go ahead with the sales to facilitate the approval or it could delay the divestitures hoping for a better outcome, the sources added.
The FCC on Sept. 14 said that the merger, without divestitures, will result in the combined company having an audience reach about 6.5% in excess of the 39% limit under the FCC rules. The agency asked Sinclair to outline what steps the company had taken or planned to take to comply with the national ownership cap.
Sinclair is required to divest licenses in at least two markets to comply with the FCC's national ownership limit and has engaged Moelis & Co. as adviser for potential divestitures, the company said in an Oct. 5 FCC filing. However, the company did not identify which exact stations it will divest.
The broadcaster in May agreed to buy all of the issued and outstanding shares of Tribune, which owns or operates TV stations in 33 markets, for a total purchase price of about $3.9 billion, plus the assumption of about $2.7 billion in net debt.
The deal is currently under review by the Antitrust Division of the Department of Justice. The DOJ may require Sinclair to divest licenses in markets for reasons unrelated to the FCC rules.
Recently, the Coalition to Save Local Media urged the FCC to reject the proposed acquisition, contending that it would stifle local and independent media voices and does not seem to be in the public interest. Sen. Richard Blumenthal, D-Conn., also asked the Commission to reject the planned deal over concerns that it would harm the public interest.