The sign is on display outside the headquarters of Sinclair Broadcasting Group Inc. in Cockiesville, Maryland, USA
Andrew Haller | Bloomberg | Getty Images
Sinclairone of the largest US broadcasters’ owners has begun a strategic review of broadcasting operations that could lead to mergers, the company said Monday.
The company and its advisors have already had deep discussions with potential merger partners, according to people close to issues that could not be spoken publicly due to the sensitive nature of the consultation. Still, they added that it is too early to decide on the valuation of a potential transaction.
At the same time, Sinclair is also considering spin-off or splitting venture units that include pay television networks that include tennis channels and marketing technology business comps. In 2023, Sinclair reorganized the company, becoming two sales organizations: local media, or broadcasters and ventures.
The company has already received board approval to explore the options. Sinclair has had important discussions with potential merger partners, but there is no guarantee that there will be a transaction or spin-off in the end.
Sinclair shares rose almost 13% after market trading.
The media industry is widely anticipating deregulation under the Trump administration, particularly in broadcast spaces that could lead to wave mergers and takeovers.
Federal Communications Commission Chairman Brendan Kerr has publicly said in recent months that he supports removing broadcaster ownership rules and CAP.
Sinclair has 178 television stations and is affiliated with major broadcasters such as ABC, NBC, CBS, Fox and CW in 78 markets.
The company reported second-quarter revenue last week, but total revenue fell 5% to $784 million, while total advertising revenue fell 6% to $322 million.
Broadcast TV station group owners have been struggling in recent years as consumers continue to cut down traditional PAY-TV bundles. Most stations make the majority of the money out of what is called retransmission fees. Charter Communication and DirectV, for the right to carry the station.
Advertising, especially political ads during local elections, also drive corporate profits.
Sinclair’s market capitalization is approximately $875 million and its corporate value is over $4.3 billion. As pay TV subscribers fell, its market value fell significantly.
Last year, CNBC reported that Sinclair was working with Moelis and was about to sell more than 30% of its broadcast TV footprint, or more than 60 stations. CEO Chris Ripley said in a recent revenue call that the company is open to offloading parts of its business and exploring deals.
Transactions for other broadcast stations are also underway. Last week, the Wall Street Journal reported it Nexstar Media GroupThe largest owner of the broadcast television station was debated to get Tegunawe are looking for sales in recent years.
