The attempted acquisition of Tribune Media by Sinclair Broadcast Group was a proposed broadcast media transaction between Sinclair Broadcast Group and Tribune Media in the United States. Formally announced on May 8, 2017, the $3.9 billion deal would have resulted in Sinclair owning—or having operational control over—stations available in 72% of all households with a television set in the United States.
The deal received criticism from multiple special interest groups and Democratic and Republican politicians who felt that the deal could give Sinclair an effective oligopoly on television broadcasting. Sinclair's prior track record of running public affairs shows and commentary segments in local newscasts among their station group supportive of conservative platforms induced concern over possible imperiled editorial independence among the Tribune stations, with said programming potentially used by Sinclair for favoritism of Republican presidential and congressional candidates in swing states. Federal Communications Commission (FCC) chairman Ajit Pai also encountered backlash over the deal; prior to the merger announcement, Pai reversed several decades-old policies pertaining to broadcast ownership—along with policies implemented by prior chairman Tom Wheeler—leading some to speculate that Pai instituted those changes to benefit Sinclair.
The purchase attempt was ultimately terminated by Tribune Media on August 9, 2018, after emerging scrutiny over proposed divestitures by Sinclair, prompting the FCC to put the deal up for review by an administrative law judge and Pai to publicly reject it. Several months after the deal's termination, Tribune Media was successfully acquired by Nexstar Media Group.
This unsuccessful acquisition occurred concurrently with two successful major media mergers: The Walt Disney Company's acquisition of 21st Century Fox and AT&T's purchase of Time Warner.
Background On February 29, 2016, Tribune announced that it would review various "strategic alternatives" to increase the company's value to shareholders, which include a possible sale of the entire company and/or select assets, or the formation of programming alliances or strategic partnerships with other companies, due to the decrease in its stock price since the Tribune Publishing spin-off and a $385 million revenue write-down for the 2015 fiscal year, partly due to original scripted programming expenditures for WGN America since it converted the cable network from a superstation in 2014.
On March 1, 2017, reports surfaced that Sinclair Broadcast Group was in discussions to acquire Tribune Media, which was approached by Sinclair management about a possible merger deal in late February. Any deal would have been forged pending FCC review of the UHF discount, a rule enacted by the agency in 1985 with the intent of encouraging ownership of UHF television stations by subtracting their total market coverage by 50% of their overall signal distribution, which had been eliminated in a 3–2 vote led by former FCC chairman Tom Wheeler in September 2016 because of its obsolescence on technological grounds. (UHF stations transmitting over the ATSC digital format have improved signal reception compared to those which broadcast over the NTSC analog standard prior to the 2009 analog-to-digital transition for full-power television stations.) Such a deal would complement Sinclair, as it only had an 11% market overlap with Tribune and required minimum divestment of broadcasting assets; additionally, Sinclair would expand its reach within the top-10 markets, which currently consist of two television properties in Washington, D.C.: one television station, ABC affiliate WJLA-TV (channel 7), and its associated 24-hour cable news channel, NewsChannel 8 (now WJLA 24/7 News). Reports later stated that Sinclair was offering to buy Tribune at a per-share price in the high $30s.
The reports of Sinclair's interest in acquiring Tribune led several unnamed station owners – which also inquired about purchasing some or all of Tribune's assets outright or through a consortium – as well as leading Tribune shareholder Starboard Value to approach 21st Century Fox about taking options to thwart the deal as a defensive measure; the major impetus was that a combination of Sinclair (which is already the largest Fox affiliate operator by station count, with 54 primary and subchannel-only affiliates) and Tribune (the network's largest affiliate operator by total market reach, as its 14 Fox stations are concentrated in top-50 markets) would potentially result in Sinclair obtaining leverage over 21st Century Fox in reverse compensation negotiations for its Fox- and MyNetworkTV-affiliated stations (the 68 Fox affiliates that the two companies own, in particular, cover a combined 28% of the U.S.). These reports were confirmed on May 8, when Sinclair announced that it would acquire Tribune for $3.9 billion,Economist, Business Section, May 13–19, 2017, page 6 along with the assumption of Tribune's $2.7 billion debt load; it beat Irving, Texas-based broadcaster Nexstar Media Group, which at the time was not willing to make a higher bid closer to Tribune's appraisal price, for the stations.
Assets that would have been acquired Had the merger been successful, Sinclair would have acquired the majority of the 42 television stations owned and/or operated by Tribune Broadcasting and their associated digital properties, along with two websites not associated with any television stations. Tribune has stations in the five largest media markets – CW affiliate WPIX (channel 11) in New York City, CW affiliate KTLA (channel 5) in Los Angeles, independent station WGN-TV (channel 9) in Chicago, MyNetworkTV affiliate WPHL-TV (channel 17) in Philadelphia, and CW affiliate KDAF (channel 33) in Dallas–Fort Worth in order from #1 through #5 – adding to Sinclair's existing station property in a Top 10 market, WJLA-TV (Washington, D.C./Hagerstown), which would have been supplanted as the largest market in which Sinclair owned a station (Sinclair would also have gained a duopoly in D.C. with the acquisition of CW affiliate WDCW). The two websites that were to have been acquired by Sinclair were entertainment news and television listings service Screener (also known as Zap2It) and its subsidiary website TV by the Numbers. On the radio side, Sinclair would also have acquired ownership of WGN (720 AM) in Chicago, which was Tribune's lone radio property.
Also acquired would have been the following assets associated with WGN-TV: WGN America – a cable-satellite television network that formerly served as the superstation feed of WGN-TV from November 1978 until December 2014 Antenna TV – a digital multicast network focusing on classic television sitcoms Chicagoland Television (CLTV) – a regional cable news channel founded by Tribune in January 1993 and shares resources with the WGN-TV news department Tribune (FN) Cable Ventures Inc. – an umbrella cable television network unit
The following equity stakes would also have been acquired by Sinclair: A 50 percent stake in This TV (co-owned with MGM Holdings) A 30 percent stake in each of the Food Network and Cooking Channel (majority owned by Discovery, Inc.)
With the purchase of Tribune, speculation arose about how Sinclair would utilize WGN America, which was in the process of shifting away from scripted content at the time of the purchase announcement. Sinclair CEO Christopher Ripley stated that it would de-emphasize high-end scripted series from WGN America's programming slate (an effort undertaken by Tribune beginning in 2015, following its reformatting of the network from serving as the superstation feed of WGN-TV into a conventional entertainment-based basic cable channel devoid of WGN-TV's news and sports programming); Ripley cited that the network's original programming budget was unjustified based on the channel's ratings (while not among the top 25 highest-rated cable networks, WGN America's viewership had gradually increased since the introduction of original scripted series, posting its highest monthly ratings in March 2017, during which it total viewership averaged 446,000 viewers and viewership among adults ages 25 to 54 totaled at 157,000).
Media analysts revived speculation tracing to the group's January 2016 purchase of Tennis Channel that Sinclair would launch a conservative-leaning cable news rival to Fox News, Newsmax TV and One America News Network (OANN) to suggest that Sinclair would use the network's existing wide national reach to launch such an effort over WGN's existing transponder and channel space. However, Variety reporter Cynthia Littleton noted in a May 8, 2017, article that launching a national news venture would create undue financial risk by adding further debt to that Sinclair had accrued since it began its spate of station purchases with the 2011 acquisition of Four Points Media Group (estimated at $3.268 billion as of March 31, 2017) as well as the debt it would have assumed through the Tribune deal. Former professional wrestling executive Eric Bischoff also posited during a Q&A session on his official Periscope account on March 14, 2018, that the Sinclair-Tribune deal would allow the former to utilize WGN America to expand the reach of Ring of Honor – which has produced a weekly program, Ring of Honor Wrestling, that has been syndicated to the group's television stations since shortly after Sinclair bought the wrestling promotion in 2011 – in a manner similar to how the Turner Broadcasting System utilized World Championship Wrestling (WCW) and its predecessors (including Jim Crockett Promotions and Georgia Championship Wrestling) from the 1970s until the early 2000s through TBS and TNT. Had the acquisition gone through and the promotion moved its broadcasts to the network, Ring of Honor Wrestling would have marked WGN America's first foray into professional wrestling since WWE Superstars left the network in 2011.
Tribune Media's former newspaper division, then called Tronc (Tribune Online Content; the company was renamed to its former Tribune Publishing moniker in November 2018), would not have been part of the merger as it was spun off from Tribune in August 2014. Many Tronc-owned newspapers posted disclaimers that they were no longer operated as part of the former Tribune parent company when covering the Sinclair–Tribune merger, including within articles that had originally been written by the Associated Press and Reuters and syndicated to those publications.
Proposed divestitures and sales Although Sinclair intended to acquire all of Tribune's television stations, in order to comply with FCC ownership regulations forbidding either common ownership of two of the four highest-rated stations or more than two stations in the same market as well as to comply with national ownership caps, Sinclair planned to flip 22 of the stations – fifteen owned by Tribune and seven stations owned and/or operated by Sinclair – to other buyers (although it would have ultimately retained control of stations in top-10 markets). Prior to its referral to an administrative law judge, the divestitures were reduced to 18 stations, with Sinclair choosing to rescind proposals to sell four television stations located in top-10 markets to third-party entities and instead directly acquire them.
Stations marked for divestiture Sinclair proposed station divestitures to the following entities to ensure compliance with local and national ownership restrictions: († - owned by Sinclair) To Cunningham Broadcasting WPIX (channel 11), New York City, New York – affiliated with The CW KDAF (channel 33), Dallas–Fort Worth, Texas – affiliated with The CW KIAH (channel 39), Houston, Texas – affiliated with The CW