UHF Discount Restoration Could Spark Fox Buy of Tribune, Analysts Say
A possible buy of Tribune by Fox may have been facilitated by the FCC’s recent action to restore the UHF discount (see 1704200048), said Wells Fargo analyst Marci Ryvicker and separately Gimme Credit analyst Dave Novosel in emails to investors.…
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The potential deal could involve Fox teaming with Blackstone to offer an all-cash bid for Tribune, both Ryvicker and Novosel said. Tribune is worth $3.2 billion, Novosel said. “The opening for such a transaction was provided by a recent ruling by the FCC allowing TV station owners to count only half of their coverage areas for UHF when complying with rules that limit national coverage to 39% of U.S. households.” Both analysts said it isn't clear what the ownership structure of the new company would look like. It could be a joint venture with Fox and Blackstone as equal partners, Ryvicker said. “The deal could also be viewed as a defensive move, since Sinclair Broadcasting has also bid on the company,” Novosel said. “A combined Sinclair/Tribune would carry more leverage in negotiations with Fox regarding carriage fees for its programming.”