Sinclair Snaps Up 8% Stake in Scripps in Advance of Potential Merger

Sinclair, which owns and/or operates 185 television stations in 85 markets, has disclosed that it has taken an 8.2% equity stake in E.W. Scripps, with an eye toward acquiring the local broadcaster.

In a Monday filing with the Securities Exchange Commission, Sinclair reported it has picked up what amounts to $15.6 million in Scripps’ Class A common stock on the open market. The acquisitions were made “in contemplation of a possible combination with the issuer.”

In the same document, Sinclair went on to state that it has been “engaged in constructive discussions with [Scripps] for several months regarding a potential combination of the two companies.” Should an agreement be reached, Sinclair believes that a “transaction could be completed within nine to 12 months.”

Sinclair believes that a buyout of Scripps could unlock some $300 million in synergies. A takeover would add another 61 stations in 41 markets to Sinclair’s local TV portfolio.

Scripps also owns the Ion TV network, which in June hammered out a multiyear extension of its deal to carry Friday night WNBA games. Ion began partnering with the WNBA in 2023, inking a three-year pact worth $40 million. In the last month, Ion has averaged 549,000 viewers per day, making it the fifth-biggest broadcast draw behind NBC, ABC, CBS and Fox.

In addition to its WNBA slate, Ion also airs Saturday night NWSL doubleheaders.

Shortly after Sinclair filed its Schedule 13D form with the SEC, Scripps responded with a statement in which it emphasized that its board “will take all steps appropriate to protect the company and the company’s shareholders from the opportunistic actions of Sinclair or anyone else.”

Scripps went on to note that its board “has and will continue to evaluate any transactions and other alternatives that would enhance the value of the company and would be in the best interest of all company shareholders.”

The Sinclair gambit comes on the heels of Nexstar’s $6.2 billion acquisition of rival Tegna. While that deal awaits regulatory approval, FCC chairman Brendan Carr appears poised to eliminate or otherwise relax the legacy regulations that prohibit any station group from owning a portfolio that reaches more than 39% of all U.S. TV households. A review of the cap is currently underway.

Investors were bullish on the announcement, as shares of Scripps closed Monday up 39.87% to $4.28. On Friday, the stock closed at $3.06. Sinclair ended Monday’s trading up 4.91% to $16.87.

Sinclair owned the Bally Sports-branded suite of RSNs from August 2019 until late 2022, when subsidiary Diamond Sports Group moved to block its parent company from having any further say over the day-to-day operation of the channels.