With the deadline to complete its $3.9 billion purchase of Tribune Media today (Aug. 8), Sinclair Broadcast Group said it would continue to find ways to close the transaction, but offered little information as to how.
In a statement issued with its second quarter earnings results, Sinclair said it is still pursuing the merger.
“In regards to the acquisition of Tribune Media Company, we are working with them to analyze approaches to the regulatory process that are in the best interest of our companies, employees and shareholders,” Sinclair CEO Chris Ripley said in the statement.
In a later conference call to discuss second quarter results, Sinclair said it would not answer any questions regarding the Tribune merger, and held fast to that promise.
Sinclair announced its intention to acquire Tribune in May 2017, a deal that on paper would give Sinclair more than 200 TV stations and coverage of more than 70% of the country. The deal has been controversial given Sinclair’s ultra-conservative bent and its plan to divest stations to entities that the company would still control.
That last part prompted Federal Communications Commission chair Ajit Pai to call for hearings before an administrative law judge looking into three particular divestiture transactions – the sale of two Texas stations – KDAF in Dallas and KIAH in Houston – and the sale of Tribune’s WGN-Chicago – to entities that Sinclair would still control. The FCC issued a hearing designation order for the merger in July. A date for that hearing hasn’t been scheduled yet.
Sinclair earlier withdrew the pending sale of KDAF and KIAH, and intended to request permission from the FCC to put these stations into a divestiture trust to be sold to an unrelated third party. Tribune also withdrew the pending sale of WGN adding it would instead acquire the station as part of the Tribune acquisition.
In addition, Sinclair said it is facing three class action lawsuits tied to the deal – basically that its sales teams colluded to fix ad prices before the deal was completed. Sinclair said it believes the “lawsuits are without merit and intends to vigorously defend against the allegations.”
The news comes as Sinclair had one of its strongest second quarter’s ever – revenue was up 11.9% to $730.1 million and operating income rose 10.8% to $131.6 million. Net income was down in the period to $28 million from $44.6 million in the prior year, but that was mainly due to a $39 million charge related to the financing of the Tribune deal.