Sinclair spins out of Lansing


SBG / Sinclair Broadcast GroupWLAJ-TV Lansing MI, a Sinclair outlet bringing ABC programming to the market, plus CW over a digital side channel, is being sold to Shield Media, which will instantaneously enter into local agreements with CBS WLNS-TV owner Young Broadcasting.

Sinclair will receive $14.35M cash for the station.

Buyer Shield is headed by Sheldon Galloway, who struck a similar deal over the summer to acquire WXXA-TV from Newport Television in the Albany-Schenectady-Troy DMA for $19.5M.

The Lansing and Albany deals are similar in more ways than one: WXXA also immediately went into a JSA and SSA with Young.

Young will handle sales for WLAJ, giving Shield 70% of the proceeds and keeping 30% for its troubles, and will also provide various services under an SSA, for which Shield will pay a base amount of $50K monthly.

Young also has a purchase option on the station, based on the current sales price and a price escalation formula that takes into account cash flow and the passage of time. The terms are along the same lines as the deal between the two companies in Albany – the difference is that the Albany service fee is a bit higher, at $66,666 per month.

RBR-TVBR observation: This deal reminds a bit of radio at the dawn of the 1996 Telecom Act trading era. The predominant thinking at the time was get big or get out. In In this case, Sinclair has opted to cash out, and Young has created a de facto duopoly via the JSA/SSA, as well as creating the possibility of an O&O duopoly down the road, regulators willing, via the purchase option.

Meanwhile, Shield can handle the licensee responsibilities association with WLAJ while Young sees to most of the day-to-day details of running the station.

Of course, the difference after Telecom was that groups were trying to max out eight-station O&Os and a genuine feeding frenzy was in progress. The current trend is extremely mild by comparison.