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Yet another wave of consolidation is approaching the television station business, with more implications for sports media.
Sinclair Inc., owner of the Tennis Channel and 178 local stations, said Monday in a filing with the U.S. Securities & Exchange Commission that it has acquired an 8.2% equity stake in fellow station owner E.W. Scripps Co. More substantively, Sinclair also said it is in active talks to acquire Scripps in full.
The two companies “have engaged in constructive discussions for several months regarding a potential combination,” Sinclair said in the SEC filing.
It is not certain when, or if, a full merger deal between Sinclair and Scripps will happen—though Sinclair said a deal closing could happen 9 to 12 months after reaching a definitive agreement. The ongoing talks, however, reflect the accelerating wave of consolidation happening in the station ownership business. Just three months ago, Nexstar Media Group struck a $6.2 billion deal to acquire Tegna Inc., which is still undergoing a regulatory review.
The Nexstar-Tegna deal, if completed, will create a powerful entity with 265 stations in 44 states and the District of Columbia. A Sinclair-Scripps merger would follow along very similar lines and add the 60 stations in the Scripps portfolio to what Sinclair has.
Federal Communications Commission chairman Brendan Carr, appointed by U.S. President Donald Trump, has been open about his desire to loosen current restrictions that limit individual station owners reaching more than 39% of U.S. households, calling that cap “arcane” and “artificial.” That sentiment, however, has also generated pushback from activists decrying the reduced choice in local TV news voices.
Sinclair added that a deal with Scripps would “require no external financing as the combined company would maintain each company’s respective debt and preferred capital structures. … Recent industry consolidation and intensifying competition reinforce [our] view that further scale in the broadcast television industry is essential to address secular headwinds and compete effectively with large-scale big-tech and big-media players.”
Scripps stock surged nearly 40% in Monday on the Sinclair news, ending the day $4.28 per share, the company’s highest close in more than a year.
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Even as Main Street Sports, formerly Diamond Sports Group, is its own entity and no longer in the Sinclair umbrella, sports would remain a core element of any pact with Scripps. The Ion network owned by Scripps reached a multiyear extension of its rights deal with the WNBA this past June.
The Scripps sports portfolio, meanwhile, also includes rights to the NWSL, the Big Sky Conference, and local rights to a series of pro teams, including the two-time defending Stanley Cup champion Panthers, the Golden Knights, the Mammoth, Lightning, and defending WNBA champion Aces. With these pacts, Scripps has been at the heart of a broader resurgence for sports in over-the-air television.
“We believe that bringing these games to linear television, putting them over the air, was going to be a great platform,” Scripps Sports president Brian Lawlor said last year at the Front Office Sports Tuned In summit. “And it turned out our timing was right.”
Sinclair and Nexstar were also the two station groups that briefly pulled their distribution of Jimmy Kimmel’s late-night show in the wake of comments regarding the killing of conservative activist Charlie Kirk.
