Tribune Media Group, the broadcasting company created in the breakup of the similarly named print-television empire, has agreed to sell itself to Nexstar for $6.4 billion after a deal with conservative Sinclair Media collapsed amid regulatory pushback.
The Nexstar merger will create America’s largest local TV broadcaster, reaching about 39 percent of U.S. homes, and garner yearly revenue of $4.6 billion, the Irving, Texas-based buyer said in a statement. Nexstar has already identified stations that could be sold in order to comply with local and national limits on broadcasting ownership that posed obstacles for Sinclair.
“We have long been attracted to the Tribune assets and the operating teams, and while we’d like to maintain ownership of the entire portfolio, we will not jeopardize completion of the deal because of a number of required station divestitures,” CEO Perry Sook told investors on an earnings call.
Tribune’s stock climbed 9.8 percent to $44.20 after the companies detailed their plans, which came just four months after the Federal Communications Commission moved to block the company’s $3.9 billion takeover by Sinclair.
Tribune filed a $1 billion lawsuit against Sinclair afterward, claiming it failed to live up to its contractual responsibilities to complete the transaction.
Sinclair could have obtained Justice Department approval for the $3.9 billion deal simply by selling 10 television stations in markets where both companies had properties. Sinclair had already committed to doing under the terms of the merger agreement, Tribune claimed.
The contract “required Sinclair to agree to divestitures to avoid even the threat of any proceeding or order relating to regulatory review,” Tribune said. “Instead, Sinclair fought, threatened, insulted, and misled regulators in a misguided and ultimately unsuccessful attempt to retain control over stations that it was obligated to sell.”
Sinclair said the claims were meritless.
The new deal “provides Tribune shareholders with substantial value and a well-defined path to closing,” Tribune CEO Peter Kern said in a statement.
Nexstar’s Sook said the company expects to follow a strategy similar to the one that helped win approval for its $4.6 billion takeover of Media General, completed just days before President Trump’s January 2017 inauguration. The company sold 13 television stations for $548 million in tandem with that transaction.
The companies will meet with the Justice Department and the FCC to further detail their plans in the near future, Sook said, and he personally assured FCC Chairman Ajit Pai that executives were prepared to satisfy government standards.
Nexstar’s operations overlap with Tribune’s in 15 markets, the companies said.
[Also read: Mic to lay off most news staff, sell assets to Bustle]
