Sinclair has revealed plans to sell off Tribune’s WGN-TV in Chicago for $60 million to a longtime business partner of Sinclair Executive Chairman David Smith.
According to the Chicago Tribune, which obtained a copy of an FCC filing detailing the transaction, WGN-TV would be sold to a newly formed company headed by Steven Fader, CEO of Atlantic Automotive, a Maryland auto dealership group in which Smith holds a controlling interest.
Under the terms of the deal, Sinclair would continue to provide programming, ad sales and other services for WGN-TV while receiving 30% of ad sales and a $5.4 million monthly service fee. The deal also allows for Sinclair to buy back the station for the same price (with some adjustments) after eight years.
Sinclair last month submitted a revised plan to the FCC outlining divestitures it intends to make regarding its $3.9 billion acquisition of Tribune Media. One of the more surprising revelations in the report was Sinclair’s plans to sell off WGN-TV in Chicago, WPIX-TV in New York and KSWB in San Diego.
In addition to the proposed WGN-TV transaction, the Chicago Tribune said that Sinclair has filed to sell WPIX-TV for $15 million to Cunningham Broadcasting, which is owned by the estate of Smith’s mother, Carolyn Smith. That deal also leaves Sinclair as the programming and service provider for the station and includes a similar buyback option.
Sinclair is looking to sell off both WGN and WPIX as a means of adhering to the national audience reach cap set at 39% by the FCC. According to an FCC filing (PDF), a combined Sinclair-Tribune will reduce its national audience reach by 1.51% after selling WGN, and by 6.31% by selling WPIX.
WGN is an independent station and WPIX is a CW affiliate.
The company is also looking to sell one or more stations in Seattle, St. Louis, Missouri, Salt Lake City, Oklahoma City, Greenboro-High Point-Winston Salem, North Carolina, Grand Rapids, Michigan, Richmond, Virginia, and Des Moines-Ames, Iowa.
Sinclair announced its potential deal to buy Tribune in May 2017. Under the terms of the agreement, Tribune stockholders will receive $35 in cash and 0.23 shares of Sinclair Class A common stock for each share of Tribune Class A common stock and Class B common stock they own.