SBG Proposes Restructuring of Allbritton Transaction
Contact: Barry Faber, EVP & General Counsel
SINCLAIR PROPOSES RESTRUCTURING OF ALLBRITTON TRANSACTION IN ORDER TO MEET OBJECTIONS OF THE FEDERAL COMMUNICATIONS COMMISSION
Change in structure will have an immaterial impact
BALTIMORE (March 20, 2014) – Sinclair Broadcast Group, Inc. (Nasdaq: SBGI) announced today that it has submitted the attached letter to the Federal Communications Commission in order to meet certain objections the FCC has to shared services agreements in particular and to shared agreements generally which are coupled with a contingent financial interest, such as a guarantee or an option.
If the proposed restructuring is approved, Sinclair will sell certain stations it currently owns to parties other than the parties who were originally contemplated to buy these stations, and following the sale will not provide any services to such stations. The stations to be sold are WHP, the CBS affiliate in Harrisburg, Pennsylvania, WMMP, the MyNetwork affiliate in Charleston, South Carolina and WABM, the MyNetwork affiliate in Birmingham, Alabama; Sinclair would also discontinue providing services to WTAT, the FOX affiliate in Charleston and would transfer to the buyer of WHP, the rights under an existing LMA to provide services to WLYH, the CW affiliate in Harrisburg. In each of these three markets, Sinclair is buying the ABC affiliate from Allbritton. Sinclair would retain ownership of WTTO, the CW affiliate in Birmingham.
“The proposed changes to the transaction will have an immaterial impact on Sinclair as a whole and on the Allbritton transaction in particular,” commented David Smith, Sinclair’s President and Chief Executive Officer. “Although we believe the shared services arrangements that were contemplated would have provided significant public interest benefits, including promoting minority ownership of broadcast stations,” Mr. Smith continued, “even without such arrangements the Allbritton transaction will result in significant upgrades for Sinclair in each of these three overlap markets. Moreover, these markets were always a very small part of the Allbritton acquistion, which was driven to a much larger extent by their ABC affiliated station and 24-hour cable news channel in Washington, D.C. The stations to be sold were expected to contribute only approximately $21 million of pro forma EBITDA in 2014, and we expect to realize full value for the stations in a sale. In addition, the sale of these stations will only reduce the previously announced $21.5 million of operating synergies created in the Allbritton transaction by $2 million.”
Sinclair Broadcast Group, Inc. is headquartered in Hunt Valley, Maryland, north of Baltimore, Maryland, and has other executive offices in Tampa, Florida, Chicago, Illinois and Seattle, Washington. Sinclair is one of the largest and most diversified television broadcasting companies, having affiliations with all of the major networks. For more information, please visit Sinclair’s website at www.sbgi.net.
The matters discussed in this release, include forward-looking statements regarding, among other things, future operating results. When used in this news release, the words “outlook,” “intends to,” “believes,” “anticipates,” “expects,” “achieves,” and similar expressions are intended to identify forward-looking statements. Such statements are subject to a number of risks and uncertainties. Actual results in the future could differ materially and adversely from those described in the forward-looking statements as a result of various important factors, including and in addition to the assumptions identified in this release, but not limited to, the ability to satisfy the closing conditions for the Allbritton station acquisitions discussed in this release, Sinclair’s previously announced acquisitions, and any required license asset third party transactions, including obtaining required governmental and shareholder approvals, Sinclair’s ability to obtain financing for the Allbritton station acquisitions and Sinclair’s previously announced acquisitions, Sinclair’s ability to successfully integrate the Allbritton stations, and the stations from its previously announced acquisitions and to maximize Sinclair’s operating synergies in connection therewith, successful execution of Sinclair’s small market strategy, the impact of changes in national and regional economies, the volatility in the U.S. and global economies and financial markets, successful execution of outsourcing agreements, pricing and demand fluctuations in local and national advertising, volatility in programming costs, the market acceptance of new programming, the CW Television Network and MyNetworkTV programming, Sinclair’s news share strategy, its local sales initiatives, the execution of retransmission consent agreements, its ability to identify and consummate investments in attractive non-television assets and to achieve anticipated returns on those investments once consummated, and any other risk factors set forth in the Sinclair’s most recent reports on Form 10-Q, Form 10-K and Form 8-K, as filed with the Securities and Exchange Commission. There can be no assurances that the assumptions and other factors referred to in this release will occur. Sinclair undertakes no obligation to publicly release the result of any revisions to these forward-looking statements except as required by law.