Sinclair May Keep Acquiring - Broadcasting & Cable

Sinclair May Keep Acquiring

Plenty of dry powder for the most bullish of broadcasters
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Having closed on a whopping 30 stations in 2012, Sinclair Broadcast Group suggested it is not done building up the station group on its fourth quarter earnings call Feb. 6.

The acquisitions included seven from Newport TV, at $466.5 million, and the Freedom Communications group for $385 million, and moved it ahead of the ABC and NBC owned groups in terms of reach, Sinclair brass said on the call.

Sinclair may not be done shopping. "With all we've acquired, we put very little stress at all on our capability to make additional acquisitions," said David Amy, Sinclair executive VP & CFO. "We're virtually in as good shape today as we go into ‘13 as regards to our buying power as we were a year ago."

Sinclair reported net broadcast revenues from continuing operations of $287.1 million for the fourth quarter, an increase of 58.8% versus the prior year period. Had the recent acquisitions been part of the portfolio for the whole of 2012, noted Amy, Sinclair's revenue would've crested a billion for the year.

"We'll continue look for the opportunities that we think will be coming to market and open up to us in one shape or form," he added. "We'll continue to be aggressive if and when they do come up."

What Sinclair won't be is a seller -- at least where Fox and four specific markets are concerned. Sinclair reported that Fox will not exercise its option to purchase its stations in Raleigh, Las Vegas, Cincinnati and Norfolk; all are either CW or MyNetworkTV affiliates. There was concern that Fox could acquire them and take the affiliation from the existing Fox station.

Sinclair worked out that arrangement with Fox in May to keep the Fox affiliation with its flagship, WBFF. Sinclair is required to make the last installment payment of $25 million to Fox by April 26.

Following its busy '12, Sinclair owns, operates or services 87 television stations in 47 markets -- reaching 27.1% of the U.S. It's big-time scale, but David Smith, president and CEO, says a great station thrives whether or not it's part of a giant group. "A real television station stands on its own in every market it's in," he told investors. "If you have a really powerful television station and a lot of great business that the public demands, that's all the negotiating leverage you need."

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