CHICAGO _ Sinclair Broadcast Group has agreed to buy Tribune Media in a cash and stock deal valued at $3.9 billion, the companies announced Monday.
Sinclair will acquire Chicago-based Tribune Media's 42 television stations and other assets, making the largest station owner in the country even bigger, pending approval from the Federal Communications Commission and federal antitrust regulators.
It will also likely mean changes for Tribune's legacy properties, including WGN-TV, WGN Radio and national cable channel WGN America, as the broadcasting company moves under Baltimore-based Sinclair, with the deal expected to close by the fourth quarter of 2017.
"This is really a historic event for Sinclair," Chris Ripley, president and CEO of Sinclair, said in an investor call Monday. "We're very excited about the transaction and what it means for the company and the industry and all the consumers that we service."
Ripley outlined a vision for the combined company that included station and corporate-level expense reductions, the sale of remaining Tribune Media real estate properties, and the scaling back of "high-cost" original programming on WGN America and reverting back to reruns, undoing a signature initiative under former CEO Peter Liguori.
"We're going to be repositioning WGNA for profitable growth," Ripley said.
Under the terms of the deal, Sinclair will pay $43.50 a share for Tribune Media and will assume approximately $2.7 billion in net debt.
The combined company will become a TV broadcasting behemoth, owning and operating 233 television stations in 108 markets, pending any required divestitures by the FCC.
Sinclair owns and operates stations in 81 markets, including Washington, D.C.; Seattle; St. Louis; Minneapolis; Pittsburgh; and Milwaukee. Its holdings include 54 Fox affiliates, the most of any station group owner.
A Chicago broadcasting pioneer, Tribune Media owns WGN-Ch.9 in Chicago, KTLA-TV in Los Angeles and WPIX-TV in New York, a portfolio that was bolstered by the December 2013 acquisition of Local TV's 19-station group for $2.73 billion.
Tribune Media also owns a 31 percent stake in the Food Network cable channel, which Sinclair valued at between $1.6 billion and $1.8 billion.
The deal would add Tribune Media's Chicago radio station WGN-AM 720 to the four radio stations already under Sinclair's ownership. Chicago Tribune publisher Col. Robert McCormick put WGN Radio on the air in March 1924, with the call letters standing for "World's Greatest Newspaper."
The Sinclair-Tribune deal was facilitated by an easing of TV station ownership restrictions under President Donald Trump and new FCC Chairman Ajit Pai. The FCC voted in April to reinstate the so-called UHF discount, which will help the combined Sinclair-Tribune entity get under an ownership cap limiting coverage to 39 percent of the TV households nationwide.
The UHF discount, a 30-year-old regulation meant to reflect the weaker coverage of UHF stations in the pre-digital era, had been eliminated by the FCC under the Obama administration in August, making it harder for TV station owners to acquire more properties.
In 2014, Tribune spun off its publishing division, including the Chicago Tribune, Los Angeles Times and other major daily newspapers, retaining its broadcast and real estate assets. The spinoff saddled Tribune Publishing, now Tronc, with $275 million in debt in order to pay a cash dividend to the parent company. Tribune Media began trading on the New York Stock Exchange in December 2014.
The company has been selling off noncore assets as traditional broadcast media face stiffer digital competition.
In September, Tribune Media sold Tribune Tower for $240 million to Los Angeles-based developer CIM Group, which plans to turn the historic site into a mixed-use redevelopment.
Tribune Media sold Gracenote, its digital entertainment and data business, to Nielsen in February for $560 million.
Liguori stepped down as CEO of Tribune Media in March.
