Sinclair President and CEO Chris Ripley told investors Thursday that he has confidence that the $6.2 billion Nexstar-Tegna merger will go through despite antitrust lawsuits against it.
“We do think that the case brought against that deal is very flimsy in terms of the merits,” Ripley said on the earnings call Thursday. “We have a lot of faith that they’ll play through this…We can significantly mitigate a similar playbook in future transactions.”
A judge issued a preliminary injunction against the $6.2 billion Nexstar-Tegna merger April 17 in a major victory for DirecTV and a group of eight state attorneys general, including California Attorney General Rob Bonta.
U.S. District Judge Troy Nunley provided his decision in a 52 page ruling Friday evening, in which he concluded that the merger between Nexstar and Tegna would hinder competition by violating antitrust laws.
Sinclair has a vested interest in Nexstar completing its merger, as it sets the precedent for the company to pursue its own acquisitions as the business of TV affiliates continues to consolidate.
Sinclair Broadcast Group owns or operates 185 television stations in 85 markets, making it one of the largest television broadcasters in the United States. Its stations are affiliated with networks including ABC, CBS, FOX, NBC, CW, MyTV, and Univision.
The Sinclair CEO answered a slew of questions on his position on deals in the local stations space on his company’s first quarter earnings call, specifically regarding his competitors’ impending merger.
“We have seen an approval of that transaction from both the FCC and the DOJ, with no conditions and no divestitures required from the DOJ, so that is a huge change in the way the DOJ has historically looked at our market,” Ripley added. “They have finally come up to date with the realities of the current marketplace, which is that we compete across many different mediums, including cable and connected TVs.”
Sinclair was in talks to acquire E.W. Scripps last fall. While that deal did not go through, Ripley said he would be happy to pickup discussions again around a similar transaction. He noted the company is also looking at “multiple other opportunities to achieve similar levels of benefits and synergies.”
“If something were to materialize with Scripps great, but if not, we are moving forward,” he added.
Warnings about sports and streaming
In his opening remarks, Ripley also emphasized the importance of live sports in the broadcast ecosystem, saying it underwrites the financial model that sustains local television stations and the local journalism they produce.
He warned that the migration of major sporting events to streaming jeopardizes the viewing experience but also the benefit for local stations.
“Live sports continues to drive the kind of appointment viewing audiences that no other platform can match. Both the FCC and DOJ are now examining facets of the live broadcast live sports broadcasting marketplace, and we believe they are asking the right questions,” he said.
The FCC launched an inquiry into the sports media marketplace in late February, examining how streaming exclusives affect consumers, broadcasters and free over-the-air access.
“The migration of major sporting events behind streaming paywalls is not just bad for consumers, it risks eroding one of the last shared viewing experiences we all have, and it pressures the very business model that funds local news and community programming,” Ripley added.
