Sinclair Broadcasting has acquired an 8.2% stake in its rival E.W. Scripps as the local TV station contemplates a potential merger with the company.
In an SEC filing, Sinclair said it acquired 6.28 million shares valued at approximately $15.6 million. It also noted that its board of directors and management team, alongside financial and legal advisors, have engaged in “constructive discussions” with E.W. Scripps for several months regarding a potential combination.
Sinclair believes that a potential deal would offer “both near- and long-term value creation for shareholders of each company,” estimate more than $300 million in expected annual synergies. It added that holders of E.W. Scripps common stock would receive an ownership stake in the combined company that Sinclair estimates would be worth three times the former’s average trading price.
Sinclair expects a merger with E.W. Scripps could be completed within nine to 12 months of reaching a definitive agreement. It added that the proposed deal would require no external financing as the combined company would maintain each company’s respective debt and preferred capital structures to avoid significant refinancing costs and “meaningfully” reduce E.W. Scripps’ leverage.
Sinclair’s takeover push comes as the local TV sector has been looking to consolidate and scale up in an effort to compete with bigger tech and media players.
“Greater scale will also strengthen broadcasters’ ability to sustain their vital public service role in producing local news,” the SEC filing states. “The Reporting Person believes combining with the Issuer provides the ability to compete successfully for advertising share, critical programming, and distribution economics through enhanced local and national scale, coupled with disciplined execution of synergies.”
In August, Sinclair said it was launching a strategic review of alternatives that would evaluate acquisitions, strategic partnerships and business combinations” with potential partners in the broadcast and the broader media and technology ecosystem. It added that it would evaluate the benefits of separating its Ventures unit through a “spin-off, split-off, or other transaction.”
In its own statement, Scripps said its board of directors and management are “focused on driving value for all of the company’s shareholders through the continued execution of its strategic plan.”
“The board and management are aligned on doing only what is in the best interest of all of the company’s shareholders as well as its employees and the many communities and audiences it serves across the United States,” Scripps continued. “The company’s 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. Likewise, the board will take all steps appropriate to protect the company and the company’s shareholders from the opportunistic actions of Sinclair or anyone else.”
Shares of E.W. Scripps surged 21.9% on Monday, while Sinclair is up 1.7%.
Sinclair’s move comes as another rival, Nexstar Media Group, is awaiting Federal Communications Commission approval of its pending $6.2 billion merger with Tegna.
Both the Sinclair-E.W. Scripps and Nexstar-Tegna combinations would require that the FCC raise or eliminate the 39% cap on national broadcast ownership, which limits entities from owning or controlling broadcast television stations that, in aggregate, reach more than 39% of TV households in the United States.
The national broadcast ownership cap was first implemented by the FCC in 1941. By 2004, Congress raised the ownership cap to 39% in an effort to ensure viewpoint diversity and prevent monopolization.
Though FCC chairman Brendan Carr has signaled he would be open to lifting or eliminating the cap, the agency’s sole Democrat Anna Gomez has argued that only Congress has the authority to do so. Sinclair CEO Chris Ripley recently said he expects the regulator to take action on the cap in the first half of 2026.
Sinclair owns, operates and/or provides services to 178 television stations in 81 markets affiliated with all the major broadcast networks. It also owns the Tennis Channel and multicast networks Charge, Comet, Roar and The Nest and recently sold its local news streaming aggregator NewsOn to Zeam for an undisclosed amount.
As of Nov. 1, the company closed 11 partner-station acquisitions, completed one station swap, sold stations in four markets, acquired non-licensed assets in two markets and obtained the NBC affiliation in one market. It also has 10 option exercises pending FCC approval and two that have been approved and are awaiting final closing.
Sinclair also said it would file “several additional partner station acquisitions” with the FCC following the reopening of the federal government.
