Tribune Media shareholders vote in favor of merger with Sinclair Broadcast Group
Sinclair Broadcast Group is a step closer to taking over Tribune Media after shareholders of the Chicago-based media company voted overwhelmingly to approve the proposed $3.9-billion acquisition.
Tribune Media said more than 99% of the votes cast by shareholders at a special meeting Thursday at the Omni Hotel in Los Angeles were in favor of the deal, which would give Sinclair control of Tribune’s 42 TV stations, including KTLA Channel 5 in Los Angeles.
“Today’s vote is an important milestone in the merger process and confirms that Tribune stockholders strongly support this transaction and the value it delivers,” Peter Kern, Tribune Media’s chief executive, said in a statement. “We look forward to continuing our work with Sinclair toward the closing of this deal.”
The deal will give the Baltimore-based Sinclair a total of 223 TV stations serving 108 markets, including 39 of the top 50, that cover about 72% of U.S. households.
The deal still needs regulatory approval from the Federal Communications Commission. The FCC recently paused its 180-day timeline for review of the merger to allow for more public comment on it. The Department of Justice is also looking into whether the deal is anti-competitive.
A number of advocacy organizations have expressed concern that Sinclair forces its TV stations to run conservative commentaries and news packages with a politically right-leaning slant. Such content would become a part of the local newscasts on KTLA in L.A., WGN in Chicago and WPIX in New York, if Tribune is absorbed into Sinclair, which is already the largest TV station ownership group in the country.
Kevin Frisch, executive director of the consumer watchdog group Allied Progress, issued a statement after the shareholder vote expressing its continued opposition to the deal.
“We believe that the merger fails to meet the FCC’s own rules and is not in the public’s interest,” Frisch said. “If approved, the deal will hurt Tribune’s employees whose jobs are at risk and consumers who will suffer from less competition, higher costs, and unreliable biased coverage.”
In addition to its TV stations, Tribune’s holdings include WGN America, Chicago radio station WGN, over-the-air digital multicast networks Antenna TV and This TV, and a stake in the Food Network, the website CareerBuilder.com and real estate holdings.
Tribune, is the former parent company of the Los Angeles Times and Chicago Tribune. The two newspapers, along with Tribune’s other publishing properties, were spun off into a new company — now named Tronc Inc. — in 2014
The FCC under the Trump administration has indicated it intends to raise the limits on the ownership of TV stations, currently capped at reaching 39% of the country. Sinclair is able to make the deal to buy the Tribune stations due to the FCC’s recent re-implementation of the “UHF discount,” which allows for only half of the coverage area of a media company’s ultra-high frequency stations to count toward the overall cap.
If the merger is approved, more consolidation of the television station business is expected to follow.
While TV viewing has declined overall due to an increase in streaming video content, stations continue to be high-margin businesses as they offer local news coverage and community identification that is largely unmatched online. Most of the stations carry highly rated programming from the broadcast networks, which have the rights to top-rated sports packages. Cable and satellite companies pay subscription fees to carry local stations, which have become a windfall for owners of those outlets in recent years.
Twitter: @SteveBattaglio
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