Sinclair Proposes Merger with Tegna, Valuing Shares at $25-$30 Each

Sinclair has proposed merging its broadcast TV unit with Tegna in a deal valuing Tegna shares at $25-$30. The news comes as Tegna is in talks to be acquired by Nexstar. Sinclair would spin off its Ventures business, including the Tennis Channel, and merge its remaining broadcast TV business with Tegna.

In a significant development for the broadcast industry, Sinclair Broadcast Group has proposed a merger with Tegna, valuing Tegna shares at $25-$30. The news comes amidst ongoing talks between Tegna and Nexstar Media Group, which has offered to acquire Tegna for $6.2 billion [1]. If approved, the proposed merger between Sinclair and Tegna would involve Sinclair spinning off its Ventures business, including the Tennis Channel, and merging its remaining broadcast TV business with Tegna.

The proposed Sinclair-Tegna merger is part of a broader trend of consolidation in the broadcast sector, driven by the need to compete with larger national media companies and technology platforms. The deal, if approved, would combine Sinclair's 185 stations with Tegna's 64 stations, creating a powerful local media company [2]. The combined entity would be well-positioned to compete in today's fragmented and rapidly evolving marketplace, ensuring the long-term vitality of local news and programming from trusted local sources [2].

Meanwhile, Nexstar Media Group has also proposed a merger with Tegna, with an offer of $6.2 billion in cash for Tegna's outstanding shares. The proposed deal would combine Nexstar's 200+ stations with Tegna's 64 stations, creating the largest local broadcasting company in the U.S. The combined entity would reach nearly 80% of U.S. households, with a presence in nine of the top ten U.S. television markets [1].

Both Nexstar and Sinclair have cited the initiatives pursued by the Trump administration as a driving factor behind these mergers. The Trump administration's policies have offered local broadcasters the opportunity to expand reach and compete more effectively with Big Tech and legacy Big Media companies [1, 2]. However, public interest groups have expressed concerns that TV mega-mergers can reduce competition and local news coverage.

The proposed mergers come as more Americans shift from cable to streaming services. According to a July Gallup poll, 83% of U.S. adults watch streaming services, while only 36% subscribe to cable or satellite TV at home [2]. This shift highlights the need for local broadcasters to adapt and innovate to remain relevant in the digital age.

The proposed mergers also have significant implications for investors. Shares in both Nexstar and Tegna rallied on the news of the proposed deals, with Nexstar's shares jumping 7.6% and Tegna's stock rising 4.3% in premarket trading [1, 2]. Further consolidation in the broadcast sector is expected as the Federal Communications Commission (FCC) considers loosening its limits on broadcast station ownership.

References:
[1] https://www.13newsnow.com/article/about-us/nexstar-to-acquire-tegna/291-c62f2011-119b-42d1-8fdf-501a289f6633
[2] https://www.cbsnews.com/news/deal-acquisition-broadcast-nexstar-tegna/