Allbritton a 'Once in a Lifetime' Opportunity For Sinclair

Author:
Publish date:

Really, was anybody but Sinclair ever going to score the Allbritton stations?

(Of course, it’s easy for me to say that now, after the deal has been announced. My sources had Raycom and Tribune as favorites, and most everyone thought WJLA Washington-to-ABC was a no-brainer, but then again, when was the last time a network bought a TV station? Seriously, when was it–I’m too lazy to look it up.)

We’ve written a number of stories about the Sinclair spending spree prior to this latest deal, such as this cover story last month, but if you tally up all of its previous acquisitions over the past two years…Fisher, Four Points, Barrington, Freedom, parts of Newport and Cox, etc….it’s about two billion spent–around double the $985 million Sinclair agreed to pay for Allbritton.

Everyone in the bidding for Allbritton–and the group was attractive to a lot of broadcasters–was willing to pay some sort of Washington premium, a bit extra for the influence and prestige (not to mention lots of nonstop political spending) of owning a station in the DC DMA. (WJLA is more than just a DC station–it’s a strong No. 2 behind WRC in DMA No. 8.)

Headquartered in Baltimore, Sinclair CEO David Smith alluded to the allure of a DC station in today’s announcement. “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,” he said.

Smith continued to note that Sinclair is “especially excited” to acquire the NewsChannel 8 cable channel, also in Washington. Smith called it “the perfect platform should we decide to expand it into other markets.”

Not included in the deal: Allbritton’s Politico website and newspaper.

Sinclair’s conservative leanings have been painstakingly divulged and dissected in the media, and the thought of the rapidly growing super-group having a soap box and bullhorn in our nation’s capital is sure to give the media watchdog groups a serious case of agita.

Wells Fargo Securities says the NewsChannel 8 thing could represent a national news network for Sinclair:

“We believe the Cable News Channel brings significant value. In our opinion, the above average multiple paid for this asset as to do with the cable news channel, and we would view this as a unusual situation rather than a ‘new norm.’ We think that SBGI has plans to roll out the cable news network across all of its markets infusing local news into a national news format.”

Wall Street applauded the deal, as it seems to do for every major station acquisition these past few years. Said Wells Fargo’s Marci Ryvicker in the same report: “We view this as an exceptional transaction that could bring significant synergies to SBGI over time.”

Sinclair’s stock hasn’t moved a whole lot, though. It’s just shy of 30 bucks as I write this Monday afternoon; it opened at $31 today, and closed last Friday at $29.49.

Smith and his Sinclair colleagues address Wall Street (and a few of us reporters still on the beat) at 9 a.m. tomorrow. Smith will say that Sinclair continues to be on the hunt for new assets; the new acquisition will put Sinclair at 22% of U.S. coverage, by the FCC’s count, well below the ownership cap.

With Local TV going to Tribune, Allbritton was the last major group on the block. So all should be nice and quiet for the rest of the summer, and the crazed year of station M&A should be wrapped up.

Right?

Yeah, right.

Related