UPDATE: Sinclair Inc. has confirmed it is actively pursuing a merger with rival broadcaster E.W. Scripps Co., having acquired 8% of Scripps’ Class A common stock, as announced in a filing with the U.S. Securities and Exchange Commission on October 23, 2023. This dramatic move signals a significant shift in the competitive landscape of the broadcasting industry.
Sinclair, based in Hunt Valley, Maryland, is one of the largest owners of local TV stations in the United States. The company stated that it is exploring acquisitions or partnerships as part of a broader strategy to adapt to an evolving broadcast industry, particularly under the Trump administration, which is expected to relax ownership regulations.
In its filing, Sinclair revealed that discussions regarding a potential merger have been ongoing for several months. The company believes that consolidating broadcast television interests is crucial for survival amid fierce competition from larger tech and media entities. Sinclair emphasized that a merger would strengthen local news production capabilities and enhance advertising and programming reach.
“Broadcast television must consolidate to survive intensifying competition,” Sinclair stated. “A merger would give the companies the scale to better compete for advertising share.”
With more than 60 stations across 40 markets, Scripps is a major player in the local broadcasting space, owning popular brands such as Scripps News and Court TV. The Scripps board expressed its commitment to acting in the best interest of shareholders and employees, stating it would evaluate all possible transactions carefully.
Scripps acknowledged that it would take “all steps appropriate” to protect the company and its shareholders from any opportunistic actions, including those from Sinclair. The announcement comes shortly after rival broadcasters Nexstar Media Group and Tegna finalized a $6.2 billion merger, highlighting the urgency of consolidation in the industry.
Sinclair’s strategy includes a large-scale review of its broadcast business, examining potential acquisitions, strategic partnerships, and business combinations with media and technology partners. The company is also considering a spin-off of its Ventures subsidiary, which manages a $1.3 billion investment portfolio.
Sinclair’s executive chairman, David Smith, controls the company and has recently expanded his media interests by acquiring The Baltimore Sun independently of Sinclair in January 2024. Sinclair estimates that a merger with Scripps could yield over $300 million in annual synergies, effectively tripling Scripps’ recent average stock trading price for its shareholders.
The proposed merger could materialize within 9 to 12 months after reaching an agreement, requiring no external financing and avoiding hefty refinancing costs. As the broadcasting sector braces for transformation, all eyes are on the potential implications of this merger for local communities and audiences across the nation.
Stay tuned for further developments on this urgent story as we continue to monitor this evolving situation. For news tips, contact Lorraine Mirabella at [email protected] or call (410) 332-6672.
