Sinclair Considers Selling 30% of Broadcast Stations

Sinclair Broadcast Group, a major owner of broadcast stations in the United States, is reportedly looking to sell over 30% of its portfolio. The company, which currently owns or operates 185 TV stations in 86 markets, has hired investment bank Moelis to assist with the sale of more than 60 stations across various regions.

These stations, which include affiliates of major networks like Fox, NBC, ABC, CBS, and the CW, are estimated to generate an average revenue of $1.56 billion for 2023 and 2024. Sinclair is open to selling all or some of these stations, which are located in top markets such as Minneapolis, Portland, Pittsburgh, Austin, and Fresno.

CEO Chris Ripley has expressed the company’s willingness to divest parts of its business in order to unlock greater value and reduce debt. The company began the process of selling these stations in February, with Sinclair and Moelis declining to comment on the matter.

In addition to the station sales, Sinclair is also exploring options for its Tennis Channel, a cable TV network that features tennis and pickleball matches. The decline in traditional pay TV subscriptions has impacted broadcast TV station groups, including Sinclair, which has seen a significant decrease in its market value over the past five years.

Last year, Sinclair underwent a rebranding and reorganization, splitting into two operating units – Local Media and Ventures. The tension within the Smith family, shareholders, and board directors has reportedly driven this division and the recent sale process.

Despite its challenges, Sinclair anticipates a boost in advertising revenue leading up to the 2024 election, with pre-booked political advertising already surpassing previous years. The company’s overall revenue and advertising revenue have seen slight increases in the first quarter, resulting in a 12% rise in its stock value.

Sinclair’s conservative editorial voice and past controversies, such as requiring stations to air promos criticizing the media for “fake stories,” have also contributed to its reputation. Additionally, the company has faced difficulties in its regional sports networks business, culminating in bankruptcy protection and subsequent litigation with its subsidiary Diamond Sports.

However, recent settlements and restructuring efforts have helped Sinclair navigate these challenges and pave the way for a potential strategic shift in its business operations.

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