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21st Century Fox has struck a deal to acquire seven TV stations from Sinclair Broadcast Group for $910 million.
The news of the purchase of stations in key NFL markets, such as Denver, Miami and Seattle, comes after Fox’s $52.4 billion December mega-deal to sell large parts to Walt Disney.
The acquisition of the stations in the deal with Sinclair and Tribune Media will strengthen so-called New Fox, which after the Disney deal will consist of the Fox broadcast network, TV stations, Fox News and Fox Sports. Fox, led by CEO James Murdoch and executive co-chairmen Rupert and Lachlan Murdoch, currently owns 28 stations in 17 markets, including New York, Los Angeles, Chicago, Dallas, San Francisco, Washington and Houston.
“This transaction illustrates Fox’s commitment to local broadcasting and we are pleased to add these stations to our existing portfolio. With this acquisition, we will now compete in 19 of the top 20 markets and have a significantly larger presence in the west, which will enhance our already strong platform,” Jack Abernethy, CEO of Fox Television Stations, said in a statement. “This expansion will further enrich our valuable alignments with the NFL, including our new Thursday Night Football rights, MLB and college sports assets. We are also happy to add many talented Tribune employees to our group, some of whom we know well.”
For Sinclair, the station sale could help get regulators’ approval for its proposed $3.9 billion acquisition of Tribune Media, which would make it the largest U.S. TV station owner. The Fox deal covers key markets where Sinclair would own two so-called full power stations after the Tribune transaction, which current Federal Communications Commission rules don’t allow. The FCC has been reviewing the Sinclair-Tribune and has been looking for divestitures.
Fox also entered a new network affiliation agreements with Sinclair (and licensees of certain stations to which Sinclair provides services) and is granting Sinclair options to acquire two of its stations, The CW affiliate WPWR in Chicago and Fox-affiliate KTBC in Austin, Texas, for potential proceeds of approximately $15 million and $160 million, respectively.
The completion of the seven-station deal is anticipated for the second half of the calendar year.
B. Riley FBR analyst Barton Crockett previously said that any Fox-Sinclair deal for stations would “pretty much wipe out lingering fears of a corrosive split between Fox and Sinclair.” After all, there had been talk that Fox could split with Sinclair and buy Ion to compete with it. “But if that were happening, we don’t think there’s any way Sinclair would sell its stations to Fox, as there clearly could be other buyers,” he said. “A potential sale also suggests an okay resolution of reverse compensation talks [between the two companies].”
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