Another major deal for local TV stations may be brewing, with Sinclair Broadcast Group (and its 185 or so local stations) revealing Monday that it is pursuing a deal for E.W. Scripps, which owns some 61 local stations across the country.
Sinclair disclosed the talks in an SEC filing, in which it noted that it has acquired more than 8 percent of Scripps’ stock in recent weeks.
“The Reporting Person’s board of directors and management team, alongside financial and legal advisors, have engaged in constructive discussions with the Issuer for several months regarding a potential combination of the two companies,” Sinclair wrote in the filing, estimating that its offer was valued at about three times the value of recent trading prices of Scripps stock.
Based on the filing, it is not clear that Scripps has been receptive to the overtures. Company executives are set to deliver a presentation on business strategies Tuesday at the Wells Fargo TMT summit.
Sinclair wrote in its filing that it believes the local TV station business needs to continue consolidating in order to survive the competition from tech companies and the big media companies, many of which own their network partners.
“Recent industry consolidation and intensifying competition reinforce the Reporting Person’s view that further scale in the broadcast television industry is essential to address secular headwinds and compete effectively with larger-scale big-tech and big-media players, as well as major broadcast groups,” the filing continued. “Greater scale will also strengthen broadcasters’ ability to sustain their vital public service role in producing local news. The Reporting Person believes combining with the Issuer provides the ability to compete successfully for advertising share, critical programming, and distribution economics through enhanced local and national scale, coupled with disciplined execution of synergies.”
Earlier this year Nexstar inked a $6.2 billion deal for TEGNA, a deal that if allowed to proceed would make it the largest owner of local TV stations in the country. Sinclair announced its own strategic review around the same time.
The hope among station owners is that the Trump administration, and FCC chairman Brendan Carr, will allow for consolidation that was simply not possible before.