Sale of Sinclair Cincinnati TV is complicated


SBG / Sinclair Broadcast GroupSinclair Broadcast Group is buying a Cincinnati television station from Newport, and has just filed to sell the one it already has there – MNTV WSTR. But there is already a potential buyer in the wings.

The station was part of Sinclair’s agreement with Fox last May, which will give it a chance to grab Fox’s Baltimore station in exchange for six of its own, including WSTR. Fox has until 3/31/13 to exercise its option.

But with CBS WKRC coming in Sinclair’s deal for Newport Television stations, it is spinning WSTR in advance of any Fox decision. But not far – the buyer will instantly enter into a JSA and SSA with Sinclair, giving its seller a continuing role in the station’s operation.

The buyer of the license and certain other assets is Deerfield Media, headed by Stephen P. Mumblow. The price will be $2M.

The JSA is structured so that Sinclair will keep 30% of advertising revenue and Deerfield will keep 70%. The SSA will cost Deerfield a base amount of $4.191M annually (about $350K per month) and will automatically increase by 5% each year of the agreement.

If Fox exercises its option before Deerfield closes on the station, the entire Deerfield transaction will be nullified. It Fox exercises it after closing, Deerfield will be subject to all terms that would have bound Sinclair were it still the licensee.

Sinclair’s Baltimore option is for the acquisition of Fox’s WUTB-TV, which would double up with WBFF. It is valued at $52.7M.

The station package that Fox can opt to acquire includes Raleigh, NC (WRDC/MNT and WLFL/CW); Las Vegas, NV (KVMY/MNT and KVCW/CW); Cincinnati, OH (WSTR/MNT); and Norfolk, VA (WTVZ/MNT). If Fox pulls the trigger on the option, the WUTB price will be decreased by $25M.