Tuesday, May 9, 2017

Will Sinclair Challenge Fox?

Sinclair Broadcast Group’s $3.9 billion deal for Tribune Media is putting Fox in a hole, reports The NYTimes Deal Book.

SBG is paying a 26 percent premium for its rival after the Trump administration relaxed a wave of regulations. Tribune gives Sinclair more heft to mount a challenge to Rupert Murdoch’s Fox News. But it’s going to cost the buyer more than just the headline price tag.

With the addition of Tribune’s 42 TV stations, Sinclair will cover more than 70 percent of households in the United States. That will transform it into the largest local broadcast owner by far. Regulators, though, may require Sinclair to sell some stations to clear the deal.

The Baltimore-based media company outlined a host of advantages that it expects Tribune to bring to the table. They include collecting more fees paid by cable and satellite distributors to Sinclair to carry local TV. Yet executives refused to disclose what cost savings they have identified.

The big question is whether Sinclair intewnds to start a ratings war with 21st Century Fox.  Murdoch’s media conglomerate is embroiled in a series of sexual-harassment scandals that have troubled its United States news network, which has a conservative-leaning viewership.

Sinclair will soon have the broadcasting muscle to compete with Fox, whose parent considered a bid for Tribune. Mr. Ripley also has a few former Fox stars he may woo, including those who left under a cloud — not least Bill O’Reilly. Such ambitions, though, will not come cheap.

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