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Sinclair Buying Freedom For $385 Million

The eight-station deal will give Sinclair two more duopolies, one in West Palm Beach-Fort Pierce, Fla., another in Albany-Schenectady-Troy, N.Y. It also makes Sinclair the country’s largest group in number of stations. Next in line for acquisition is LIN’s WWHO Columbus, Ohio, with a deal to be announced very soon.

Sinclair Broadcasting is buying Freedom Communications’ eight-station broadcast TV division to Sinclair Broadcasting for $385 million, Sinclair announced this morning.

The deal gives Sinclair two more duopolies, one in the West Palm Beach-Fort Pierce, Fla., market (DMA 38), another in Albany-Schenectady-Troy, N.Y. (DMA 58).

The Freedom acquisition is Sinclair’s second major buy in just over two months: In early September, the company announced it was buying Four Points Media’s seven stations in four markets for $200 million.

Sinclair executives emphasized the importance of doubling up where possible and hinted at more acquisitions.

“It is our intent to continue evaluating television station transactions which are accretive and where we can use our expertise and presence to improve profitability and competitive position,” David Smith, Sinclair president/CEO said in the earnings press release announcing the Freedom acquisition (see separate story here).

One such deal could be announced as soon as tomorrow. A source said the company is poised to announce that it is buying LIN Television’s WWHO, a CW affiliate, in Columbus, Ohio (DMA 34) for an estimated $7 million.

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In Wednesday morning’s earnings conference call, Smith provided additional context to the company’s acquisitions.

“The benefits for us are scale and leverage,” Smith said. “Looking at the structures in those markets…we honestly believe we’ll put deals together to get better efficiencies in those markets. We’ll try to bring as much scale as we can to help these people grow their businesses.”

The reference to deals is multi-faceted. With the Freedom and Four Points deals, Sinclair boosts its station count to more than 60, in the process becoming the nation’s largest station group in terms of number of stations. Such size gives Sinclair significant leverage in negotiating retransmission contracts with cable and satellite companies, as well as network and syndicated programming providers.

In addition, owning multiple stations in a single DMA enables Sinclair to improve operational efficiencies with the market.

“For these guys there are some real synergies,” said a source in the financial sector. “The big gem in this [Freedom] deal is West Palm…. It also gives them a little balance in being so heavily Fox and CW.”

Current regulations permit duopolies only if there are at least eight other different owners of full power stations in the DMA and one of the stations in the duopoly is not among the top-4 ranked stations. Freedom’s WPEC, a CBS affiliate, consistently ranks among the top stations in West Palm but Four Points’ WTVX, a CW affiliate, does not.

Sinclair executives pegged the Freedom deal multiples this way: 6.6 times EBITDA for Sinclair, 9 times for Freedom.

“We like SBGI’s recent acquisitions of Freedom and Four Points stations for several reasons,” Marci Ryvicker, Wells Fargo analyst, wrote following the conference call. “Freedom was purchased at a buyer’s multiple of 6.6x 2012-13 blended EBITDA (9x seller’s 2010-11); Freedom’s station in West Palm Beach will create a duopoly for Sinclair (with a Four Points station); combined, the acquisitions would add [about] $59 million a year ($65 million in political years, $53 million in non-political) of free cash flow (FCF); and leverage is expected to only climb 0.5x (currently 3.83x) incorporating both acquisitions. Lastly on the acquisitions, while a tax shield will be created by the Freedom acquisition, it will be outweighed by the additional FCF; thus we still expect SBGI to become a federal cash tax payer in 2012.”

Sinclair executives anticipate the multiple will improve as Sinclair achieves increased efficiencies.

“It isn’t so much what the multiple from the seller’s perspective is, it’s what we can do when we’re done,” said Steve Marks, vice president and COO of the television division. “6.6 times is conservative. A few years from now, we’ll tell you the real number.”

Ryvicker also noted that the Freedom acquisition allows Sinclair to diversify from its heavy concentration of Fox affiliates.

The Freedom group includes five CBS affiliates, two ABCs and one CW. Sinclair has 15 Fox affiliates.

The Freedom stations are:

  • WPEC (CBS) West Palm Beach, Fla. (DMA 38)
  • WWMT (CBS) Grand Rapids-Kalamazoo-Battle Creek, Mich. (DMA 42)
  • WRGB (CBS)-WCWN (CW) Albany, N.Y. (DMA 58)
  • WTVC (ABC) Chattanooga, Tenn. (DMA 86)
  • WLAJ (ABC) Lansing, Mich. (DMA 115)
  • KTVL (CBS) Medford-Klamath Falls, Ore. (DMA 140)
  • KFDM (CBS) Beaumont-Port Arthur-Orange, Texas (DMA 141)

Sinclair had all but rejected a deal with Freedom based on the sales prospectus asking price of $400 million to $500 million.

“We were originally not interested, based on valuations,” said David Amy, Sinclair executive vice president/CFO. “But Freedom approached us.”

Amy projected the Freedom and Four Points acquisitions boost Sinclair’s annual free cash flow roughly 40%. 

Smith said he expects the deal to close in 2012’s first quarter or early second quarter, pending regulatory approvals. Until then, Sinclair will operate the Freedom stations under a local marketing agreement, he said.

People familiar with the broadcast TV M&A market had mentioned several possible candidates to acquire Freedom’s station group. Along with Sinclair, they include Belo, Gannett, LIN, Nexstar, Gray and Raycom. However, several of those potential buyers were constrained by debt, challenges in accessing financing or, in Nexstar’s case, proposed sale of one owner’s stake in the company.

Sinclair, on the other hand, has consistently topped the list of likely buyers for Freedom. Sources in the financial sector note that Sinclair is among the few groups with either financial resources on hand or access to them and little debt to constrain it.

Freedom began shopping its geographically diverse station group last fall for $400 million to $500 million, according to sources who had seen the sales prospectus. The asking price translated into somewhere around 8-10 times 2010 cash flow. The asking price multiple was higher for estimated 2010-11 blended cash flow — roughly 9-11 times — due to minimal, at best, political revenues this year.

As the $385 million purchase indicates, the multiple — based on projected 2010-11 cash flows of $45 million — was lower.

The Freedom sale originally was couched as stock sale, primarily because Freedom’s owners wanted to avoid the tax burden of an asset sale.

That Freedom opted for an asset sale of its broadcast properties suggests that Freedom’s owners were heartened by the recent McGraw-Hill station group sale to E.W. Scripps for $212 million, the equivalent of a 10x seller multiple and an 8x buyer multiple.


Comments (14)

Leave a Reply

tom denman says:

November 2, 2011 at 9:25 am

I don’t know.. Like many groups, Sinclair was on the ropes when the economy was tanking. Now paying 8X BCF seems too aggressive, especially from a already highly leveraged group. Also these networks don’t line up well with Sinclair’ FOX stable of stations with the risk of diluting operational focus. But of course it’s their a$$.

    len Kubas says:

    November 2, 2011 at 11:54 am

    “on the ropes” is quite distinct from “challenged stock price” and one suspects you actually meant the latter.

    tom denman says:

    November 2, 2011 at 4:13 pm

    Nope, I meant what I said. With the way they were leveraged just three years ago, right about the time automotive and political ads dried up and EBITA dropped 30%, Sinclair could be considered on the ropes. Just Monday, they reported revenues down 4+% Q3. And they’re becoming more leveraged by expanding at 8X BCF? As I said prior, it’s their risk to take, but I argue not a smart one.

elliot jacobson says:

November 2, 2011 at 9:51 am

SBG will no doubt squeeze very dime out of these new aquisitions and make them beyond serviceable vs. the debt. Sadly, there will be a sizeable human toll at the former Freedom, Four Points and Lin properties. Traffic, Business, National Sales and eventually MC operations will all be hubbed leaving behind a wake of layoffs. Programming and News will be “refreshed” with advertorial content and Sales will be re-evaluated with lower compensation structures and flavor of the month initiatives (ie. Ring of Honor Wrestling, MobiDeals) with no client return.

    len Kubas says:

    November 2, 2011 at 11:55 am

    what exactly is wrong with “hubbed master control?” Is this a business, or a jobs program?

    elliot jacobson says:

    November 2, 2011 at 7:10 pm

    Icon…Jobs program? Have you watched a CBS Stations or Local LLC station before?. You could run a full :30 during the dead air from their efficient master control hub

Linda Leavell says:

November 2, 2011 at 10:10 am

Not allowed duopoly is the top-4 ranked stations. Put WSYX (ABC) or WTTE (FOX) for Sale.

    Michael Castengera says:

    November 2, 2011 at 3:18 pm

    They don’t own WTTE.

none none says:

November 2, 2011 at 11:48 am

No problem Cunningham Broadcasting is sitting in the wings.

Hans Schoonover says:

November 2, 2011 at 12:32 pm

A down business could create $100k cash per every million in reduce (AR) sales and the BCF would increase by $850k (8.5 X BCF)

Sandhi Kozsuch says:

November 2, 2011 at 6:04 pm

Freedom should now change their name to Shackled Communications.

Abbie Harrison says:

November 3, 2011 at 12:38 am

Unless the FCC is totally asleep at the wheel, there is no possible way they will allow a triopoly of any kind in the Columbus market with buying WWHO. There aren’t even enough stations for a duopoly, and the FCC has slapped Sinclair’s hands for the flip-flop they did with Glencairn/Cunningham a decade ago when Sinclair bought River City and flipped then-owned WTTE to Glencairn. Even in Nashville, Sinclair’s third station is under an “outsourcing agreement”.

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Four Player mentally stimulating games on dice

chess is an old activity. around that is what preferred these knowledge carries.

conversely do you know chess surprisingly likely evolved from Ludo love Pachisi (at present the national bet on asia) in which, as Ludo, it was once a four player adventure implying dice?

should you ever used mentally stimulating games a touch too cerebral and no ideal folks online game which should involve especially particular success and player governmental policies, may a few traditional Chaturanga a shot. (or Chaturaji it is usually Shaturanga as known.)

just be cautioned life-style and offer! In aged of india a game evolved into quite popular as well was first portrayed with regards to sorts of excessive [url=http://www.1mobile.com/qpid-network-dating-2880966.html]qpid NEtwork[/url] amounts associated with (certain, it seemed to be in fact,the reality is a gaming games) which in turn a one Maharajah was required to forbid it at this created by illness!

I know that you have some actually temperamental mentally stimulating games coupled with board game enthusiasts readily available historians, And the truly great argue on the foundation using mentally stimulating games to become rather than paid out. please feel free to take this article with an excessive group of predominantly sodium since I made a decision to brew the assumptions if you wish to create a crisper and much more exciting studying ordeal. the experience policies usually are my personal potion collected as a result of totally different extracts (and many any technology of the my own) towards present a usable online application that’s attracting modern-day end user. For a little bit advanced list of assorted Chaturanga differences furthermore variants of the company’s reports consider the good direct anyone to the little almost immediately to use heart involved absolutely featuring people people.

what is actually Chaturanga?Chaturanga is early american native four player bet on chances and moreover knowledge. standing out from mentally stimulating games, with those it really carefully involved, It explains a more expansive discord between rivalry and as well,furthermore political linking a great deal warring kingdoms. along with mentally stimulating games is a bet on direct grapple with no portion of lady luck involved, Chaturanga is a more productive board game, quite closer to what we may think about a modern “bloodline golf game,

any historians perceive Chaturanga and as well mentally stimulating games due to the fact online games owned by different instances in american native indians historic past, showing our political situation of days past. bit asia was most ruled utilizing a single superior cal king in addition emper, 2 player chess (maybe Shatranj) been recently most liked. otherwise, which means the country was previously reigned over due to assortment independent princes or at the throes involving civil world war, Chaturanga somewhat more truthfully simulated all of the “tables for kings” since quickly props up changing alliances, that betrayals to translucent ronomness really seasons. today’s identical can be to compare mentally stimulating games in to the wintry combat along with two gigantic opposing team preventing along with nation dominance. Chaturanga is just nearer to what we’ve more and more nation’s wheeling not to mention engaged for an improved use on a sunny day.

Chaturanga plank sidingChaturanga is frequently tried you are using Ashtapada that may be like the an 8×8 made use of in mentally stimulating games one with some completely unique but white markings. not have are afraid of, absolutely quite possible to use Chaturanga at your normal mentally stimulating games aboard too arena am not going to get because of it.

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Chaturanga major RulesChaturanga is firstly a four player round even though it is additionally performed created by two along with three guitarists. it is reasonably well suited for groups play 2 or 2 although it is usually grinded as a free for anyone. a number of version rules to the online game with reference to temporal alliances but they have a tendency to begin in an instant coming from participate in, human nature receiving how it’s.

nearly player gambles on that role in the place of Rajah, an ancient indian ruler. the aim of the hand is to end up being the Maharajah or the “nice master” that by subduing your opponents. this can be done through a clever education represent money and additionally rivalry generating use of trouble-free however clever repair between cube punching bright run positional.

any player’s affiliate internet marketing is composed of another creations faithfully similar to such used by chess, in the document and therefore objective.

The Rajah tactics exactly like the double in mentally stimulating games, One sq,rectangular in any instruction whether or maybe athogonally diagonally.

The hippo changes just like rook having mentally stimulating games. the nurse can exercise several unoccupied pieces in any orthogonal new trend (ahead, in reverse, right or left)

The horse actions [url=https://www.facebook.com/pages/Qpid-Network/285744041497098]qpid NTEWORK[/url] simillar to the dark night over modern day day day mentally stimulating games. that may one block orthogonally andf the other with the ability to diagonally hop over all the jewelry.

The transport are superficially corresponding to the beven sohop progresses in another way. it could actually move about solitary 2 squares in any of the diagonal suggestions it will can jump over some accessories regardless of the process.

The Pawns are the same in principle as mentally stimulating games pawns. they might be cross one sq,rectangular orthogonally forward obviously they are making a take in when they have to diagonally.

insurance coverage pieces’ exercises closely resemble that surrounding mentally stimulating games, choosing which cut that you are advance is among Chaturanga’s a large amount of initially motion.

In Chaturanga all performer’s twist starts off with a jiggle towards two cube. The information folded determine which sections is possibly traveled in players’ switch. You can choose getting in touch with move one cut, Both portions or perhaps absolutely not by any means during your convert. if you ever ever rotate the same number on dice you can even make a double work with piece of writing.

the sport was most at first enjoyed elongated 6 on the sides chop sharing with four fairly easy ultimate outcomes. 4 on the sides cube remaining by means of D sport are a great change. bear in mind, with no any d4s very helpful, you can easlily superglue two if not more conventional six sided dice develop a working d4. you need to take care that a majority of results part of a guidance! If excessive passion will just fuss, feel free to try it out who have atypical 6 on the sides dice. the game is wonderfully playable by although the part of chance is huge.

stealing Opponents’ works along with PromotionsIn a no cost for any activity you might need another performer’s piece by stepping into its certainly block, much like in chess. at the same time, The lines attain one of following opposing team which is by “Concourse connected with offering, if a ship enters the block outlined by just three extra lines you take them all. even though this by no means requires, It is a incredibly strong head that can transform the track of the game play.

Pawns will definitely be promoted at the time they access fantastic opponents genuine “deer” and also “elephant” pieces rrn which individuals remodel into the corresponding chunk. keep in mind that this sometimes happen only when you really gone specific article is something that is pawn promoted to finally. if this is not the case, The pawn should be able to wait until the section he is to be sold easily into is lost. at the time one particular promoting arrives immediately.

whenever a Rajah is regarded as took away a wonderful issue turns up. The capturer are now able to management the enemies creations as though they were his or her own however, the Rajah quantity player may as well react and make an attempt to ransom his Rajah!

a govern to remember simple fact don’t, in spite of the “politics lawsuit” aboard, you’ll be able for an item for another piece of the identical colorings.

Chaturanga receiving, state policies also RansomsChaturanga is a game of a few endgame the nature normally, reasonably, achieved it underneath liked by established minded Victorians who have been the first westerners to encounter it.

distinict mentally stimulating games, Chaturanga probable for the participant to remain on board even after or even Rajah is distracted. the experience stops when a player conquers two behind it’s enemies’ Rajah components. there’re amazing changes of this govern however story have pass the extent of this article. i will have to in addition to in addition to put in plain words within a one check in content.

to a four player on the internet when an additional player’s Rajah is grabbed any armed forces goes into your mutiny to civil fight. The acquiring player immediately futures the control of the army with the main manager. He is liberated to move his adversary’s designs as if the pair were his! although, the individual on the other hand should hurl solitary two chop over your go, because if my friend received in command of michael’s real military services one. if thez red player comes with orange player’s Rajah contained he are now able to choose to move sometimes red or it may be bits among any single chuck your day dice.

the player world health organization mislaid the Rajah may still move the cube and as a consequence action basic even though armies crank turns up. He will likely attack a person’s material operated caused by the puppy’s occupier, however,though that they cannot ravage waste his personal colored. some cash,in this with a touch of knowledge and fortune, Even a new player who else dropped a Rajah can always take back an entire control of armies.

If a person minus her Rajah manages to obtain get r’s Rajah, a flow concerning criminals may come about if you think bettors agree to achieve this. but both bettors gain full management of their armies additionally the Rajahs are put to be found at their groundbreaking poses. there is another sheet sitting at that positioning at that moment, it is usually immidiately followed out not to mention replaced from your moving back vengeful Rajah.


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