Taking advantage of new rules that allow broadcasters to own more than one television station in a given city, Sinclair Broadcast Group Inc. said yesterday that it plans to buy 10 stations in deals initially valued at $78 million.
The purchases come as no surprise. Sinclair is buying stations that it has already paid to program but was formerly barred from owning outright.
"It's really an announcement we expected," said Christopher H. Ensley, an analyst with Lazard Freres & Co. LLC in New York. "They had already gotten everything at those stations but the license."
To get around the federal government's former ban on ownership of more than one station in a market, known as the "duopoly rule," Sinclair developed a station ownership structure in which it owned one station and programmed another in the same city.
Sinclair replicated this strategy in cities around the country, including Baltimore, where the company owns WBFF-TV (Channel 45) and programs WNUV-TV (Channel 54).
On Aug. 5, the Federal Communications Commission did away with the duopoly rule, and the Cockeysville broadcasting company was seen as an immediate beneficiary of the change.
Yesterday's deals mark the first major step in the realization of Sinclair's ambition to own two stations in its key markets.
The company is buying the stations in three separate transactions:
Sinclair said it has filed with the FCC to buy KOKH-TV in Oklahoma City from Sullivan Broadcasting Co. Inc.; WXUP-TV in Nashville, Tenn., and WUPN-TV in Greensboro, N.C., from Mission Broadcasting Inc.; and KFBT-TV in Las Vegas from Montecito Broadcasting Corp. Sinclair will pay $32 million in cash for these four stations, and will receive debt forgivenesses worth $21.2 million.
In a separate announcement, Sinclair said it will buy five additional stations -- KRRT-TV in San Antonio, WBSC-TV in Greenville, S.C., WRDC-TV in Raleigh, N.C., WABM-TV in Birmingham, Ala., and WVTV-TV in Milwaukee -- from Glencairn Ltd. in a stock purchase initially valued at $8 million.
The final value of the Glencairn deal will be determined by the average closing price of Sinclair's stock for the five days prior to the close of the purchase.
Sinclair will buy WCWB-TV in Pittsburgh from WPTT Inc. for $16.8 million in cash. The owner of WPTT, Edwin L. Edwards Sr., has been criticized as a mere front man who allowed Sinclair to bend FCC rules, a charge he and Sinclair have disputed. With this sale, WPTT is shutting down and Edwards is selling out his share of Glencairn for $1.5 million in cash.
He now plans to turn his attention to two new companies, Eddie Productions and Edwards Broadcasting. "I'm going to have a focus on buying radio stations across the country and get into this race," Edwards said.
"We are excited to see Mr. Edwards achieve his financial success and are pleased that the duopoly rules have allowed Sinclair the opportunity to advance that process," Sinclair President David Smith said in a statement.
All of the deals are subject to FCC approval, and are expected to close by spring. Sinclair's stock slipped 31.25 cents to close at $12.125.