Chris Ripley, Sinclair’s chief executive, said the company was well positioned to manage the networks. “This is a very exciting transaction,” he said in a statement. “While consumer viewing habits have shifted, the tradition of watching live sports and news remains ingrained in our culture.”
Sinclair is taking on a significant amount of debt to secure the deal, borrowing $8.2 billion, or more than 80 percent of the purchase price, to complete the acquisition. The company said it would create a wholly owned subsidiary to buy the sports networks, effectively allowing it to keep that debt off Sinclair’s balance sheet. The broadcast company itself already holds $3.9 billion of debt and has a modest profit margin of 11 percent. Last year, earnings fell 41 percent to $341 million.
Sinclair, which owns nearly 200 local television stations, is a leading voice for conservative views. It has faced criticism in recent months for requiring its stations to air segments defending the use of tear gas on migrants at the border.
Sinclair made a bid last year to buy rival Tribune Media for $3.9 billion in a move that would have created a conservative media behemoth with the potential to challenge Fox News as the pre-eminent media outlet on the right. The deal fell apart in August after encountering opposition from federal regulators.
Known primarily as a broadcaster, Sinclair could become a significant player in cable with its acquisition of the regional sports networks, which are available only on pay television systems. The company now has the opportunity to bundle the sports networks with local news broadcasts to attract customers. (Broadcast stations, despite being freely available over the air, are also carried by cable and satellite operators for a fee.)
Article source: https://www.nytimes.com/2019/05/03/business/media/sinclair-disney-regional-sports-networks.html?partner=rss&emc=rss
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