Sinclair reportedly talking to Tribune Media about merger

Sinclair bought the Tennis Channel for $350 million so it could be interested in further cable channel acquisitions. Image: Sinclair

Sinclair Broadcast Group is reportedly talking with Tribune Media about the two companies combining.

According to Reuters, which cited unnamed sources, any deal between the two broadcast groups would likely first require the FCC to change TV station ownership rules. Sinclair might reportedly be looking at buying pieces of Tribune like its CW broadcast stations or its holdings such in WGN America or the Food Network.

Sinclair last year did buy the Tennis Channel for $350 million so it could be interested in further cable channel acquisitions.

As for Tribune Media, the company has been busy divesting pieces of its business lately. Most recently, Tribune sold its metadata unit Gracenote to Nielsen for $560 million. That and other sales come as Tribune Media prepares to replace outgoing CEO Peter Liguori.

RELATED: Nielsen buys Gracenote in bid to boost audience measurement capabilities

Further broadcast industry consolidation has been a big topic of discussion lately now that new FCC Chairman Ajit Pai and his seemingly more laissez-faire approach to regulation is in charge at the Commission. Of the rules governing the ownership cap, which control how much reach individual broadcasters can acquire, the UHF discount is of particular interest.

Last year, the FCC changed the UHF discount governing ownership rules for broadcast stations so that UHF stations would now have to count 100% of their reach toward the cap, instead of the previous 50%.

Since that time, broadcasters like CBS have urged the FCC to reinstate the UHF discount before making any further reforms on the ownership rules that currently cap a broadcast station group’s national audience reach at 39%.

RELATED: CBS earned $1B in broadcast retransmission fees in 2016

CBS is one broadcaster looking to grow its national footprint and is therefore keeping a close eye on any moves the FCC makes in regards to ownership rules.

With the success CBS has seen in growing retrans and reverse comp rates, CEO Les Moonves said during last month’s earnings call that his company may be prepared to strike up more M&A should the FCC decide to revise the ownership cap rules for broadcasters.

“If the cap is lifted we’d strategically look to buy more stations,” Moonves said.

Nexstar Media, which just recently received the FCC’s approval for its $4.6 billion acquisition of Media General, a deal that put it in control of 170 total stations, is looking for more deals.

According to TVNewsCheck, Nexstar Media CEO Perry Sook said during Tuesday’s earnings call that his company is “already in discussions, should the [FCC ownership] rules change.”