Sinclair considers selling 30% of broadcasting station

sinclairThe company, one of the largest U.S. broadcast station owners, is considering selling more than 30% of its footprint, according to people familiar with the matter.

The company hired maurice As an investment banker, the company has identified more than 60 stations across the U.S. that would be eligible for sale, said the people, who requested anonymity because the negotiations are private. Sinclair owns or operates 185 television stations in 86 markets.

These stations include a mix of affiliates such as Fox, NBC, ABC, CBS, and the CW. If sold together, the average revenue in 2023 and 2024 would be an estimated $1.56 billion, the people said. Sinclair intends to sell all or part of its stations in top markets like Minneapolis. Portland, Oregon. Pittsburgh; Austin, Texas and Fresno, California.

Sinclair CEO Chris Ripley said Wednesday that the company is open to offloading some of its business, although he did not provide details.

“As we have always said, we have no sacred cows,” Ripley said on his company’s earnings call. “We want to free up total component valuations that we believe are significantly undervalued, and to the extent that asset sales make sense to unlock and deleverage that value. , that’s what we should do, be open as well. ”

The company officially launched sales in February, one of the people said.

Spokespeople for Mr. Sinclair and Mr. Morris declined to comment.

Sinclair is also considering options for Tennis Channel, a cable TV network that features sports and pickleball games, the people said. Bloomberg first reported the development.

Broadcast television groups have struggled over the past five years as millions of Americans canceled their traditional pay TV subscriptions. Most stations make money from so-called retransmission fees, which traditional TV distribution companies like Comcast, DirecTV and Charter pay per subscriber for the right to broadcast their stations.

Sinclair has lost more than 70% of its market value over the past five years. The company’s market capitalization is approximately $975 million, and its enterprise value is approximately $4.7 billion.

Last year, Sinclair rebranded and reorganized, splitting the company into two business units. station-focused local media and Ventures, which houses the Tennis Channel but also serves as an investment vehicle.

Some people familiar with the matter say the division of the company’s divisions and the recent process of selling some of its stations stems from tensions within the Smith family, which helped found Sinclair, its shareholders and directors.

These stations will be put up for sale months before the 2024 election, and typically provide high political ad revenue for TV broadcasters. Mr. Sinclair announced in Wednesday’s results that it had pre-booked $77 million in political advertising for the second half of the year through Election Day. That compares to $21 million during the same period in 2020, when former President Donald Trump and Joe Biden last ran for president. on the ticket.

The company’s overall revenue and advertising revenue both increased slightly in the first quarter. Sinclair stock rose 12% on Thursday.

Sinclair stations are known for conservative editorial voices, and the company faced backlash in 2018 after requiring some stations to read blurbs criticizing the media for “fake stories.” .

The process also comes after Sinclair faced headaches with its regional sports network business.

Sinclair acquired the largest portfolio of regional sports networks from Disney in 2019 for $10.6 billion, including $8.8 billion in debt. Diamond Sports, an independently owned, unconsolidated subsidiary of Sinclair, filed for bankruptcy protection last year amid increased code reduction and massive debt.

Diamond later sued its parent company, Sinclair, and the suit was settled in January. Sinclair paid $495 million to settle Diamond-related lawsuits.