Friday, September 20, 2013

Sinclair Emerges As Major Broadcasting Player

In the last 2½ years, Sinclair nearly doubled its portfolio of TV stations to 108 from 58, becoming the largest broadcaster in terms of number of stations, according to USAToday.

It will own and operate 149 stations when its pending deals are completed.

With interest rates low and ad dollars plentiful, Sinclair is hardly alone in scooping up TV stations. Other companies — including Gannett, Media General, Nexstar Broadcasting and Tribune Co. — also have bought or announced deals to acquire more stations this year.

But Sinclair's singularly torrid pace of growth has fueled debate about enduring questions on concentration of media ownership and fresh attempts by federal regulators to scale back broadcasters' ambitions.

Julian Sinclair Smith
Founded by David Smith's father, Julian Sinclair Smith, the company started with one small local station in Baltimore in 1971 and has retained its strong roots in the area. David Smith and his brothers took control of the company in the 1990s and began expanding it by acquiring stations. Sinclair started offering its shares to the public in 1995. But the Smith family firmly controls the company, with a majority stake in its shares. Four of the eight seats on the board are occupied by David Smith and his brothers.

Sinclair's acquisitive mode has been good for investors. Its stock more than doubled — up about 136% — in the last 12 months. Its revenue for the first six months of the year is up 26% from a year ago to $596.8 million.

Particularly eye-opening — and perhaps most illustrative of Sinclair's ambition — is a deal announced in late July to buy the seven stations owned by Allbritton Communications for $985 million. It would give Smith a foothold in the influential Washington, D.C.-market that would be used for a broader national expansion. The deal is expected to close by the end of the year.

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