NEW YORK (AP) — Broadcast giant Sinclair has taken a more than 8% stake in E.W. Scripps, as it eyes a potential merger with the smaller local TV rival.
In a regulatory filing on Monday, Sinclair disclosed that it purchased 8.2% of Scripps' Class A common stock “in contemplation” of a wider bid to acquire the company.
Sinclair said that it had held months of talks “regarding a potential combination" with Scripps — and maintained that increasing scale overall is “essential to address secular headwinds and compete effectively” in the U.S. media landscape, pointing to growing competition and other recent consolidation seen across the industry.
Scripps acknowledged Sinclair's new stake and maintained its board would “continue to evaluate any transactions” in the best interest of shareholders. But at the same time, Scripps said it would also take steps to protect itself from any “opportunistic actions of Sinclair or anyone else.”
Shares of Scripps soared nearly 40% on Monday, trading at around $4.28 by market close. Meanwhile, Sinclair's stock was up 4.91%, closing at $16.87 apiece.
The prospect of a Sinclair buying Scripps arrives amid wider consolidation across the U.S. media industry — particularly in the local TV landscape. Just this past August, Nexstar Media Group announced a $6.2 billion deal to buy broadcast rival Tegna.
Companies like Sinclair — as well as Nexstar and Tegna — have argued that these kinds of acquisitions would allow them to better compete with both bigger media and tech players vying for consumers' attention today. But critics warn of wider homogenization of news. In other words, more and more local TV stations becoming “duplicators” of syndicated reporting — and sharing corporate owners who may decide not to air certain content.
In September, for example, both Nexstar and Sinclair chose to preempt Jimmy Kimmel's late night show across their ABC-affiliated stations, over remarks the comedian made following the killing of conservative activist Charlie Kirk. The blackout lasted at dozens of local TV markets for more than a week, even after Disney-owned ABC lifted its own suspension.
Sinclair Broadcast Group, based in Hunt Valley, Maryland, owns, operates or provides services to 185 TV stations in 85 markets affiliated with all major broadcast networks and owns the Tennis Channel. The company has a reputation for a conservative viewpoint in its broadcasts.
Meanwhile, Cincinnati, Ohio-based E.W. Scripps Co. operates more than 60 local stations in over 40 markets. It also owns national news outlets Scripps News and Court TV, as well as entertainment brands like ION.
Whether or not the two companies agree to a merger has yet to be seen — and would still need the regulatory greenlight. But that could be likely under the Trump administration. Nexstar's proposed merger with Tegna would require the Federal Communications Commission to change rules limiting the number of stations a single company can own, for example, and FCC Chairman Brendan Carr has already expressed openness to changing the rule.
FILE - Floodlights light up the E.W. Scripps logo on the company's headquarters in Cincinnati, Jan. 31, 2006. (AP Photo/Al Behrman, File)
