The year is young and already Sinclair Television Group has announced acquisitions involving multiple television stations and the creation of a new subsidiary to house and run them. And according to Wells Fargo analyst Marci Ryvicker, it has many irons in the fire.
The acquisitions included selected stations from Cox Media Group, the entire Barrington group and the rights to JSA/SSA relationship with other stations. Sinclair created Chesapeake TV to operate the incoming smaller-market stations.
Taking in a presentation from Sinclair exec David Smith, Ryvicker noted the following glimpses into the company’s priorities going ahead:
* There may well be more stations acquisitions if the price is right
* Sinclair is not happy with the current level of retransmission fees accorded broadcast given that it has far more viewers than most basic cable channels – case in point, Cincinnati where the viewer score is a lop-sided local broadcast news 33,000, CNN 45
* The company is looking into zone-selling within a market; for example, according to Ryvicker it has divided Baltimore into 13 zones, and micro-targeting the market may allow it to sell as many as 13 American Idol ads instead of just one, generating who knows how much more cash per spot.
* The bigger Sinclair gets, the more leverage it believes it will have when negotiating retransmission consent, making equipment acquisitions, etc.
* The company believes the incentive auctions are still a few years away, and does not anticipate participating.
* It does anticipate finding new and creative uses for the spectrum it holds, including the provision of 4K TV broadcasting or joining with wireless firms to create a download channel.
RBR-TVBR observation: Anybody who believes that local broadcasting is an antiquated medium whose time has come and gone simply isn’t paying attention. The broadcast track record says it all. Over the decades it has faced many challenges and has not only met them, it has continued to grow stronger.
We suspect when the dust clears from the particularly daunting challenges hurled at all traditional media by the internet, that will be the case once again. And one of the reasons will be forward-looking companies such as Sinclair.