The broadcaster announced this morning a two-part deal valued at $240.0 million. Sinclair picked up Bonten Media Group Holdings, which owns 14 television stations in 8 markets.
In addition, Cunningham Broadcasting — controlled by trusts for the children of Sinclair founder Julian Smith — will pick up the membership interest of Esteem Broadcasting. It has four stations that Bonten already runs via joint sales agreements.
Sinclair expects the deal to close by the end of September, following FCC approval.
The stations it’s acquiring only reach about 1% of U.S. households. But before yesterday, the deal would have put Sinclair close to the federal ceiling that bars a broadcaster from reaching more than 39% of households; Sinclair already reaches 38%.
The FCC wiped that complication away yesterday by restoring a rule that the agency eliminated in August: It only counts half of the homes reached by UHF stations against the ceiling. By that calculation, Sinclair would only reach about 25% of the country even after its new deal.
“We view this transaction as a ‘drop in the bucket’ for [Sinclair],” Wells Fargo Securities’ Marci Ryvicker says. “It by no means precludes other deals from happening – large or small.” The company is believed to be eyeing a mega deal with Tribune Media if ownership rules are further relaxed.
Sinclair shares are down nearly 1% today.
Boten has five ABC affiliates, four NBC, two Fox ones, and three not tied to a Big 4 network.
Sinclair CEO Chris Ripley says his company’s “economies of scale help us bring improvements to small market stations, including investments in news, other quality local programming, and multicast opportunities with our emerging networks of Comet, Charge! And TBD.”
But Free Press CEO Craig Aaron calls the deal a “scandal.”
“Sinclair has gone out of its way to boost Trump, praise his appointees and even hire his former spokespeople,” he adds. “Now they are cashing in… The last thing local communities need is fewer perspectives and cookie-cutter content pushing an ideological agenda. But that’s what Trump’s FCC is set on doing: delivering favors that line the pockets of conservative outlets offering the administration favorable coverage.”