The deal includes Allbritton’s flagship WJLA, Washington’s ABC affiliate, and the NewsChannel 8 D.C. cable news network. To comply with FCC ownership rules, Sinclair will sell four of its current stations: WABM (MNT) and WTTO (CW) Birmingham, Ala.; WHP (CBS) Harrisburg-Lancaster-Lebanon-York, Pa.; and WMMP (MNT) Charleston, S.C. It says NewsChannel 8 “provides the perfect platform should we decide to expand it into other markets, especially given the amount of local news we produce across our entire portfolio.”
Sinclair Broadcast Group today announced that it has entered into a definitive agreement to buy Allbritton Communications’ seven ABC affiliates for $985 million. The deal also includes NewsChannel 8, a 24-hour cable-satellite news network covering the Washington, D.C., metropolitan area.
Completion of the transaction is subject to the usual closing conditions, including approval by the FCC and antitrust clearance, as applicable. Sinclair said it anticipates that the transaction will close and fund in the fourth quarter of 2013. Sinclair also said it expects to fund the purchase price at closing through a bank loan and-or by accessing the capital markets.
The Allbritton stations to be owned and operated by Sinclair (with 4.9% U.S. coverage) are:
- WJLA ABC Washington (DMA 8)
- WBMA-LP ABC Birmingham-Tuscaloosa-Anniston, Ala. (DMA 42)
- WCFT ABC Birmingham-Tuscaloosa-Anniston, Ala. (DMA 42)
- WJSU ABC Birmingham-Tuscaloosa-Anniston, Ala. (DMA 42)
- WHTM ABC Harrisburg-Lancaster-Lebanon-York, Pa (DMA 43)
- KATV ABC Little Rock-Pine Bluff, Ark. (DMA 56)
- KTUL ABC Tulsa, Okla. (DMA 59)
- WSET ABC Roanoke-Lynchburg, Va. (DMA 68)
- WCIV ABC Charleston, S.C. (DMA 98)
In addition, Sinclair will acquire Allbritton’s NewsChannel 8, the region’s only 24-hour local cable/satellite news network dedicated to covering news, weather, sports and local information to over 2 million households in the Washington metropolitan area.
To comply with FCC local television ownership rules, Sinclair expects to sell its existing stations in:
- Birmingham, Ala. — WABM (MNT) and WTTO (CW)
- Harrisburg-Lancaster-Lebanon-York, Pa. — WHP (CBS)
- Charleston, S.C. — WMMP (MNT)
It added, however that it expects to provide sales and other non-programming support services to each of those stations pursuant to customary shared services and joint sales agreements.
“We are thrilled to add the Allbritton properties to our growing portfolio and national footprint,” said David Smith, president-CEO of Sinclair. “To buy a full-blown news operation in our nation’s capital and an infrastructure that allows us to be connected to our branches of government and be at the pulse of national issues is a once-in-a lifetime event. We are especially excited to acquire the NewsChannel 8 local news channel, not only for the content it can provide our existing news stations, but moreover because their regional cable presence provides the perfect platform should we decide to expand it into other markets, especially given the amount of local news we produce across our entire portfolio.”
Including the Allbritton station acquisitions, all previously announced acquisitions, and pro forma for expected synergies, Sinclair said its 2011 and 2012 net broadcast revenues would have been $1.609 billion and $1.865 billion, respectively. The $985 million purchase price represents an 8.7x multiple of the average 2011-2012 cash flow including $21.5 million of operating synergies, which excludes any synergies associated with rolling out a national news cable channel.
In response to the news, Craig Aaron, president-CEO of the watchdog group Free Press, made the following statement: “The rapid expansion of Sinclair Broadcast Group — which is poised to double the number of stations it controls nationwide — is unwelcome news for local TV viewers. The company’s cookie-cutter approach to local news and repeated use of the airwaves to push a partisan agenda are well known. And the idea that one company should be allowed to control so many stations in so many markets is simply outrageous. What will it take for the FCC to wake up?
“Sinclair has exploited loopholes and laziness at the FCC to build its empire. The FCC needs to scrutinize these proposed deals and stop allowing covert consolidation through shared services agreements that allow Sinclair to run two or even three stations in a single market. In particular, it should require stations Sinclair has indicated it will put up for sale as part of this deal to be sold to independent competitors, not Sinclair front groups.
“Viewers need competing newsrooms and access to a range of viewpoints on local issues. And that means they need the FCC to ditch its rubber stamp and start doing its job to preserve localism, competition and diversity.”