Sinclair Deal By the Numbers: Purest of Pure-Plays in it For Long Haul
Some key numbers jumped out at me while studying Sinclair’s deal to acquire the Freedom Broadcasting stations, which the group announced this morning.
That’s the new percentage of U.S households Sinclair will reach if/when its deals to acquire the Four Points and the Freedom stations pass regulatory muster.
We’ve got the marathon in New York this weekend, and that’s 26.2 miles. Sinclair similarly seems to be in this business for the long run.
That’s now much Sinclair is shelling out between its $200 million Four Points deal, and $385 million Freedom pact–numbers that collectively get us closer to those megadeals from five or more years ago.
Sinclair stock shot up to around $10.64 as I write this, up around 19% on a day when it announced third quarter earnings, and revealed its plans to buy the Freedom stations.
6.6 and 9
On its call this morning, Sinclair’s execs said the Freedom pricetag represented a 6.6 X buyers multiple, based on 2010 and 2011 revenue, and a 9 X seller’s multiple.
73 and 46
If/when the deal goes down, Sinclair will own or provide services to 73 television stations in 46 markets. Its portfolio will consist of 20 Fox affiliates, 18 MyNetworkTVs and 13 CWs, 11 ABCs and, 9 CBS affils.
That’s the number of subchannels that will be in the expanded Sinclair portfolio.
Speaking of digital activity, Sinclair has been one of the strongest advocates for broadcasters staying in the TV station business in the face of FCC efforts to reduce their spectrum holdings, notes my DC colleague John Eggerton, and one of the most vocal defenders of the broadcasting business and its digital future.
Industry watchers I spoke to applaud Sinclair’s unabashed bullishness on broadcasting.
“It’s a wonderful statement about where we are in the television business,” says station broker Richard Foreman, who has worked on deals for Sinclair in the past, but not on the two most recent. “David [Smith] and his people see a marvelous business opportunity that may not continue, and they’re out there getting it done. It’s nothing but positive-positive-positive about where we’re going in the TV business.”
Key to the deal for Sinclair is West Palm Beach, where Sinclair acquired WTVX-WTCN-WWHB in the Four Points acquisition, and WPEC in the Freedom pact. Sinclair EVP/CFO David Amy says one of the first orders of business will be establishing leadership at WPEC (Brien Kennedy had been GM there, but left last year for WCCO Minneapolis and Gene McHugh is interim GM.) Besides stoking efficiencies in that market, Sinclair will benefit from Florida’s usual role as a swing state.
Sinclair also acquired WWMT Grand Rapids, and Michigan looks to be a battleground state too.
The timing of the deal is no coincidence. “The deal is happening on the cusp of the most profitable year in broadcast history,” notes one watcher.
So is Sinclair done acquiring? It’s to be determined. “There’s nothing pending, that’s for sure,” says Amy. “But we’ll keep our eyes open, and if an opportunity comes up, we’re not going to be shy.”