Sinclair Broadcast Group and Tribune Media announced plans Tuesday to sell 23 television stations after they merge as part of their campaign to get the deal approved by federal regulators.
The stations would be sold to six different buyers, including a Towson auto dealer and investor, Baltimore-based Cunningham Broadcasting Corp., Washington-based Howard Stirk Holdings, Iowa-based media giant Meredith Corp., a New York investment firm and another party yet to be announced.
Tuesday's announcement revises and expands the number of stations that Hunt Valley-based Sinclair has proposed selling to secure approval for its $3.9 billion deal to buy Tribune Media. In March, Sinclair proposed shedding TV stations in 11 markets to allow the merged company to stay under federal ownership limits. It's now planning to shed stations in 18 markets.
Without such sales, the Tribune Media acquisition, announced last May, would have given Sinclair control of 233 television stations, including 42 Tribune-owned stations and a presence in such top markets as New York and Chicago. (Tribune Media, formerly part of Tribune Co., once owned The Baltimore Sun and other newspapers, but spun them off in 2014.)
"We've always known Sinclair was going to have to sell some units to eliminate duplication and to not have monopoly power over more than 39 percent" of national TV viewership to comply with federal ownership rules, said Karryl Leggio, a finance professor at Loyola University Maryland.
She said it appears that Sinclair revised its original list of proposed sales based on feedback from the Federal Communications Commission, which must approve the deal.
The plan announced Tuesday does not include plans to sell a New York station to Cunningham, a company controlled by the estate of the Sinclair chairman's mother. But it includes plans to sell several more smaller stations than originally proposed.
"Sinclair believes they are aligned with what the FCC has told them up to now," Leggio said. "They believe this is approvable by the FCC."
The proposed merger has run into strong opposition from those worried about the loss of diverse voices across the broadcast landscape, a concern heightened by Sinclair's conservative leanings. Some critics also point to relationships between Sinclair and some of the intended buyers, including Cunningham and the Towson auto dealer.
The company has defended the merger as a necessity in a changing media landscape in which broadcasters now face competition not just with each other but with online news and entertainment sources.
"After a very robust divestiture process, with strong interest from many parties, we have achieved healthy multiples on the stations we are divesting," said Chris Ripley, Sinclair's president and CEO, in a statement. "While we continue to believe that we had a strong and supportable rationale for not having to divest stations, we are happy to announce this significant step forward in our plan to create a leading broadcast platform with local focus and national reach."
Sinclair said it expects the merger to close before the end of June, pending approval by the FCC and antitrust clearance by the U.S. Justice Department.
Under the plans announced Tuesday, Cunningham Broadcasting would acquire stations in Dallas and Houston rather than WPIX in New York.
Cunningham, which owns eight TV stations, including WNUV-TV in Baltimore, is owned by the estate of Carolyn C. Smith, the mother of Sinclair's controlling shareholders, including David D. Smith, Sinclair's executive chairman, and his three brothers.
Howard Stirk, a company affiliated with the conservative political commentator Armstrong Williams, would acquire Sinclair stations in Seattle and Salt Lake City and a Tribune station in Oklahoma City. One of the largest African-American-owned station owners, the company has acquired other stations from Sinclair in recent years.
Standard Media, an affiliate of New York investment firm Standard General, would buy nine stations in seven smaller markets, including Oklahoma City, Harrisburg, Pa., and Richmond, Va.
Meredith Corp., a print and broadcast media conglomerate based in Des Moines, Iowa, would acquire a Tribune station in St. Louis.
As announced previously, WGN in Chicago would be sold to WGN-TV LLC, a company affiliated with Steven Fader, the CEO of Towson-based Atlantic Automotive Corp., a holding company for MileOne Autogroup, a network of 40 auto dealerships in Maryland, Pennsylvania, Virginia and North Carolina. That sale was valued earlier at $60 million.
David Smith has a controlling interest in Atlantic Automotive and serves as a member of its board, Sinclair's proxy statement shows. Atlantic is also a Sinclair advertiser and tenant.
The sixth, unnamed buyer would acquire seven stations in such markets as Seattle, Miami, Denver, Cleveland and San Diego.
The terms of none of the deals were disclosed, but Sinclair would provide sales and other services to WGN and the stations acquired by Howard Stirk.
The Evening Sun
The revised plan to sell stations does not make the deal any more palatable to critics such as Allied Progress, a Washington-based consumer advocacy group that's been a staunch opponent.
"They are too big currently and Tribune is too big," said Karl Frisch, executive director of Allied Progress. "Sinclair can't be trusted to deal honestly with the DOJ and the FCC. Time and again, they've claimed they'd cut ties with stations and divested so they could continue to grow. [But] they cut ties in name only."
Frisch said FCC Chairman Ajit Pai, appointed by President Donald J. Trump, "is clearing the deck for Sinclair."
UPDATES:
4 p.m. April 26: This story has been updated to correct the spelling of Steven Fader's first name. The Sun regrets the error.