Sinclair Inc.’s proposed acquisition of fellow local television station owner E.W. Scripps Co., publicly suggested for the first time just a week ago, is now officially on the table.
A mere seven days after Sinclair, the owner of Tennis Channel and 178 local stations, said it had acquired a minority equity stake in Scripps in advance of a potential merger, it has made its formal offer for the entire company. The unsolicited bid for Scripps is for $7 a share, including $2.72 in cash and $4.28 in combined company stock. Scripps is currently trading at about $4.40 per share, and that’s only after a 40% bump last week after the first wave of Sinclair news.
Sinclair said the deal, if complete, would create a company with a market capitalization of $2.9 billion and reap about $325 million annually from market and corporate savings and new revenue opportunities. An agreement would accelerate a wave of consolidation across the television station ownership business and have sizable ramifications in sports media. The cash component of the deal would amount to $233 million.
“The proposed transaction would create a stronger and more resilient platform capable of sustaining local journalism, expanding national audience reach, and driving operating efficiencies in the highly competitive local video media market,” Sinclair CEO and president Chris Ripley wrote in a letter to the Scripps board.
“As we have stated before, recent industry consolidation and intensifying competition underscore our view that achieving greater scale in the broadcast television industry is critical to overcoming secular headwinds and competing more effectively,” Ripley wrote.
Sinclair, which is seeking a response on its offer by Dec. 5, says it currently owns 9.9% of Scripps, up from 8.2% last week as it continues to accumulate shares.
Scripps, which owns 60 stations, said it is reserving substantive comment until after its board reviews the Sinclair bid, and added that no shareholder action is currently required.
“The company’s board of directors will carefully review and evaluate any proposals, including the unsolicited Sinclair proposals, to determine the course of action that it believes is in the best interest of the company and all of its shareholders as well as its employees and the many communities and audiences it serves across the United States,” Scripps said in a statement.
Market Matters
Even as Main Street Sports, formerly Diamond Sports Group, is its own entity and no longer under the Sinclair umbrella, sports would remain a core element of any pact with Scripps. The Ion network owned by Scripps reached a multiyear extension of its rights deal with the WNBA this past June.
The Scripps sports portfolio, meanwhile, also includes rights to the NWSL, the Big Sky Conference, and local rights to a handful of pro teams, including the two-time defending Stanley Cup champion Panthers, the Golden Knights, the Mammoth, Lightning, and defending WNBA champion Aces. With these pacts, Scripps has been at the heart of a broader resurgence for sports in over-the-air television.
Sinclair’s bid for all of Scripps follows a separate, $6.2 billion deal between Nexstar Media Group and Tegna Inc., which is still undergoing regulatory review.
