Sinclair Broadcast Group Inc. plans to sell two television stations to help the company move ahead with a $1 billion planned purchase of seven ABC affiliates and a Washington-based cable news network.
Selling the stations for a combined $97.4 million will allow Sinclair to comply with updated broadcast ownership rules as it aims to win regulatory approval on the purchase from Allbritton Communications by July 27. Sinclair said Monday it expects that deal to close in the third quarter.
The Hunt Valley broadcaster said it will sell ABC affiliate WHTM-TV in Harrisburg, Pa., to Richmond, Va.,-based Media General and will sell the non-license assets of Fox station WTAT-TV in Charleston, S.C. to Cunningham Communication, which owns the license. The ABC affiliate makes up about $83.4 million of the combined sale price, Marci Ryvicker, a senior analyst for Wells Fargo Securities, said in a research note.
The TV station owner has agreed that it will not provide sales services or guarantee the debt on the two stations after they are sold, part of an effort to satisfy the Federal Communications Commission's cross-ownership concerns. The FCC has been tightening restrictions over the number of TV stations controlled by a single owner in a market
In March, Sinclair had offered to restructure the Allbritton deal and proposed eliminating "shared service agreements" at TV stations in three of the markets where it plans to buy an ABC affiliate from Allbritton. Sinclair had already planned to sell stations in those markets, including Harrisburg, Charleston and Birmingham, Ala., but would have continued to provide services to those stations.
"There should be no more issues with the Allbritton transaction in terms of the FCC's [shared service agreement] mandate, and we see no reason why this deal should not close promptly," Ryvicker said in the note. "We think final closing of Allbritton will be a positive catalyst for [Sinclair] as well as the broadcast space."