Strong TV groups said to be on Sinclair shopping list


SBG / Sinclair Broadcast GroupIf Sinclair is committing its holiday wish list to paper in the form of a letter to Santa Claus, it likely includes the names of several attractive television groups, according to a Bloomberg report. Any acquisition would fill an M&A void left by the company’s failure to land the Belo group, which went instead to Gannett.

According to the report, Sinclair was working behind the scenes to trump Gannett’s offer for the company, mainly by working on some of the institutional investors with big chunks of Belo stock. There was no attempt to deal with Belo directly.
At the end of the day, the sale to Gannett stands.

The wave of consolidation hitting the television industry has been strong with numerous deals announced throughout 2013. Rising retransmission consent fees, election year advertising boom cycles and possible future gains via adoption of the ATSC 3.0 standard have all increased the prospects of the business.

The wave has also fueled a get-bigger-or-get-out mentality.

The groups that are believed to be strong targets for Sinclair are Gray, LIN and Raycom. All have enjoyed strong growth, but at the same time have not been among the most active players in the acquisition market.

RBR-TVBR observation: Along with Nexstar, Sinclair has been one of the most aggressive buyers. When speculating on its acquisition plans, it is wiser to think when rather than if. The fact that the FCC is now considering elimination of the UHF discount puts a premium on acting sooner rather than later so that any portfolio increases can benefit from a grandfather clause should a group bump up against the 39% national audience reach cap.