Sinclair to buy Tribune Media for $4 billion 

Mega deal is the biggest in television history: 42 station-group sold to Maryland-based broadcaster

Ends local ownership of WGN-TV and WGN Radio after more than 60 years

Sinclair’s purchase of Tribune Media will change the landscape of local television as we know it.

For one, Tribune – with roots in television going back to 1948 as the WGN Continental Broadcasting Company – was one of the few broadcast groups to compete with the major broadcast networks in the top markets. Along with WGN-TV here in Chicago and WPIX in New York, and KWGN in Denver (acquired in 1966), the acquisition of Los Angeles’ KTLA in 1985 solidified it as a top player, with strong independent stations. The group helped form The WB Network with Warner Bros. in 1994 to compete with Fox.

When Sam Zell took over Tribune in 2007, his disastrous tenure (led by Randy Michaels) made many smart television and radio people stampede for the exits. Tribune filed for bankruptcy less than a year later and after coming out decided to go on a buying spree buying out the Local TV station group. Tribune split in 2014, becoming Tribune Publishing (now tronc) and Tribune Media.

Enter Hunt Valley, Md.-based Sinclair, a company with roots going back to 1971 in Baltimore as Chesapeake Television Corporation, owner of then-independent (now Fox affiliate) WBFF-TV. In the 1990’s, the company expanded ferociously buying the Abry Communications, Act III, and River City station groups. During this time, Sinclair used trickery to get around ownership rules – in 1991, a shell company they created purchased WPTT in Pittsburgh while owning Fox affiliate WPGH in the same market – this way they could control more of the market’s ad revenue. In 1998, Sinclair was instrumental in switching five big-market UPN affiliates to the WB, hurting the former network’s distribution (both networks closed in 2006 to form The CW.)

In recent years, Sinclair’s news operations have leaned more conservative, airing documentaries critical of John Kerry and Mark Hyman’s right-leaning commentaries.

Thanks to the FCC’s recent decision to reinstate the UHF discount – something yours truly said was as a scam perpetrated by the Trump Administration – who has strong ties to Sinclair, companies can now buy and swap stations more freely than they could in the past. And on Monday, Sinclair made good on a promise to purchase Tribune Media in one of the most expensive deals in television history – paying $43.50 a share or $3.9 billion and assuming $2.7 billion in debt, beating out 21st Century Fox, Nexstar, and other suitors. When all’s said and done, Sinclair will own or operate 233 stations covering 72 percent of the nation, including stations in seven of the top ten markets and 22 of the top 30. The transaction gives Sinclair ownership of WGN-TV, WGN Radio, and diginet Antenna TV; cable network WGN America; plus stakes in the Food Network and Career Builder.

The transaction means Sinclair would own a station in every media market in Illinois (except Rockford), including areas served by the St. Louis market, where they would own three stations alone. Sinclair already owns stations downstate including Champaign, Springfield, and Peoria. Tribune owned another station in Illinois – ABC affiliate WQAD, which serves the Davenport-Rock Island-Moline market.

The transaction gives Sinclair significant leverage – 28 percent of the country’s Fox affiliates, more than the Fox network itself; the most ABC and CW affiliates; and of course, powerful independent WGN. It also gives them leverage over cable and satellite operators when it comes to retransmission consent – meaning, paying for the right to carry the broadcaster’s signals – which could force consumer’s cable bills to go up again.

And there is talk of Sinclair starting a conservative news network to compete with Fox News. It already owns a regional news channel channel in Washington, D.C. and would gain one in Chicago with reach-challenged CLTV.

In a conference call yours truly listened to, Sinclair indicted they would divest stations in order to comply with the ownership regulations. The company said the transaction would let them invest in new technologies (including the new ATSC 3.0 standard.) However, Sinclair said it would not proceed with original programming on WGN America further – meaning the critically-acclaimed Civil War drama Underground is likely done. Earlier, WGN America canceled dramas Salem, Outsiders, and Manhattan – obviously due to the questionable future surrounding the company.

With Sinclair also buying WGN Radio, its future in its current format is questionable.

Also remains to be seen is WGN-TV’s commitment to sports programming – currently the station has broadcast rights to the Cubs, White Sox, Bulls, and Blackhawks, with deals for all expiring in the next few years – sports rights was one of the reasons WGN ended its affiliation with The CW. Not helping matters are ratings declines this season for the Blackhawks and Bulls, the latter coming off a poor season (both teams were eliminated in the first round of the playoffs.)

And speaking of The CW, the ratings-challenged network’s future may also be up in the air again as contracts with stations come up in 2021. Sinclair now has the reach to potentially begin a new broadcast network, if they wanted to. The CW may have to adjust their programming demo in order to keep Sinclair; in other words, superhero shows and teen dramas may no longer cut it as young viewers are tuning out broadcast TV in larger numbers.

Here are a few statements from Tribune and Sinclair CEOs, culled from a press release:

Peter Kern, Tribune’s Chief Executive Officer:

“Today’s announcement is the culmination of an extensive strategic review, which has delivered significant value to our stockholders,” said “Since we announced the strategic review 15 months ago, we have streamlined the business, monetized non-core assets, strengthened our balance sheet and returned more than $800 million to stockholders — all of which has resulted in a 50% increase in stockholder value. We are extremely proud to join Sinclair, and we’re excited that Tribune stockholders and employees will have the opportunity to participate in the long-term growth of the combined company.”

Chris Ripley, Sinclair President and CEO:

“This is a transformational acquisition for Sinclair that will open up a myriad of opportunities for the company. The Tribune stations are highly complementary to Sinclair’s existing footprint and will create a leading nationwide media platform that includes our country’s largest markets. The acquisition will enable Sinclair to build ATSC 3.0 (Next Generation Broadcast Platform) advanced services, scale emerging networks and national sales, and integrate content verticals. The acquisition will also create substantial synergistic value through operating efficiencies, revenue streams, programming strategies and digital platforms.”

David Smith, Executive Chairman of Sinclair:

“This will be the largest acquisition in our company’s history, and I want to thank everyone from the Sinclair team, as well as our advisors and bankers who made this possible,” commented David Smith, Executive Chairman of Sinclair. “Television broadcasting is even more relevant today, especially when it comes to serving our local communities. Tribune’s stations allow Sinclair to strengthen our commitment to serving local communities and to advance the Next Generation Broadcast Platform. This acquisition will be a turning point for Sinclair, allowing us to better serve our viewers and advertisers while creating value for our shareholders.”

Later this week, yours truly will break down more of this historic deal – what it means for WGN-TV, WGN Radio, Fox, and the city of Chicago. For the latest, follow T Dog Media on Twitter @tdogmedia.

Sinclair-Tribune press release: