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Sinclair Broadcast Group has officially submitted a bid to buy out E.W. Scripps entirely, just one week after Sinclair blindsided Scripps with signals of a hostile takeover.
It all started on Nov. 17 when Sinclair, the conservative-leaning owner of 185 TV stations across the country, acquired an 8.2% stake in Scripps, declaring “a possible combination” of the companies in regulatory filings. In response, Scripps said its board would “protect the company and the company’s shareholders from the opportunistic actions of Sinclair or anyone else.” Sinclair has since reached 10% ownership of the company’s stock. On Monday, Sinclair proposed to buy the entire company at $7 a share, consisting of $2.72 in cash and $4.28 in common stock.
Sinclair CEO Christopher S. Ripley said in a letter to Scripps’ board that Sinclair was “submitting an updated, actionable merger proposal,” saying the deal would “strengthen local journalism.”
Scripps described the proposal as “unsolicited” in a press release, but goes on to confirm the company will consider the offer.
“[Scripps] today received an unsolicited acquisition proposal from Sinclair,” the press release reads. “Consistent with its fiduciary duties and in consultation with its legal and financial advisors, the company’s board of directors will carefully review and evaluate any proposals, including the unsolicited Sinclair proposal, to determine the course of action that it believes is in the best interests of the company and all of its shareholders as well as its employees and the many communities and audiences it serves across the United States.”
The scale
Scripps is headquartered in Downtown Cincinnati and oversees 61 local stations across the country, including local ABC affiliate WCPO (Channel 9, or “9 News”). Maryland-based Sinclair is the nation’s second-largest local media company, owning 185 TV stations, including two local stations: WKRC-TV (Channel 12, or “Local 12”) and WSTR-TV (Channel 64, or “Star 64”). If approved, a Sinclair-Scripps merger could make Sinclair the largest local TV broadcaster in the nation, but another major merger in the works could keep Sinclair in second place.
In August, Nexstar Media Group, the nation’s largest owner of local broadcast stations, announced plans to purchase rival Tegna Inc. for $6.2 billion. When announcing the deal, Nexstar CEO Perry Sook credited the Trump administration for allowing local broadcasters “the opportunity to expand reach.”
Rules to know
Perry is referring to a regulatory loophole known as the ultra-high-frequency (UHF) discount. It was utilized by then-Federal Communications Commission Chairman Ajit Pai during Trump’s first administration, and favored by current FCC Chairman Brendan Carr. Critics sounded the alarm on the loophole in 2017 when Sinclair nearly purchased 42 local TV stations from Tribune Media. The loophole would have allowed Sinclair — known for requiring local stations to play “must-run” segments on conservative national politics from former Trump surrogates — to reach 72% of U.S households, far exceeding the federal limit of 39% imposed by Congress. The nearly $4 billion deal ultimately fell through when Tribune backed out of the merger and sued Sinclair for $1 billion, citing “misconduct.”
With Trump back in office, Sinclair is taking another swing at expanding its reach, but Trump 2.0 might not be fully on board.
In a post to Truth Social on Sunday, Trump questioned the value in reviving the loophole, worried the it could allow for more liberal voices in local media.
“If this would also allow the Radical Left Networks to ‘enlarge,’ I would not be happy,” Trump wrote on Truth Social. “ABC & NBC, in particular, are a disaster – A VIRTUAL ARM OF THE DEMOCRAT PARTY. They should be viewed as an illegal campaign to the Radical Left. NO EXPANSION OF THE FAKE NEWS NETWORKS. If anything, make them SMALLER!”
Nexstar, which is considered somewhat ideologically conservative, responded to Trump’s post: “We continue to believe the landscape is ripe for regulatory reform and that we are on the path to completing our transaction,” the company wrote. “We agree with President Trump that the status quo is no longer acceptable, nor should the government do anything to strengthen the stranglehold of legacy media and Big Tech on the marketplace of ideas.”
But experts tell CityBeat that massive consolidations of local news organizations, under any single political ideology, threatens that marketplace of ideas. University of Cincinnati professor Jeffrey Blevins teaches and studies media ownership rules, the FCC, telecommunication law and other related topics. He said local decision-making is disappearing from local news.
“You’re taking out local voice and local discretion; it’s almost like they’re acting like their own kind of network,” he said. “The idea of localism is foundational in the Communications Act, that we recognize that this is a big country, you know, there’s a lot of geography. Taste and sentiment; what’s of interest in one geography is not necessarily going to be the same as the other.”
Public comment on the FCC’s ownership cap rule remains open through Dec. 10. Sinclair has given Scripps until Dec. 5 to respond to their offer.