Sinclair may sell radio stations

Baltimore company also considers creating subsidiary

June 09, 1999|By Mark Ribbing | Mark Ribbing,SUN STAFF

Sinclair Broadcast Group Inc., a Baltimore broadcasting company that has become a significant national owner and operator of radio and television stations, said yesterday that it is considering selling or spinning off its radio properties.

In a statement released after the close of the stock markets, Sinclair said it is "actively exploring options with respect to its group of radio stations." The company said it would consider an outright sale of Sinclair's radio stations or the creation of a radio-only subsidiary.

Sinclair said that if it were to set up a radio subsidiary, the company would expect to raise $175 million to $200 million in a public stock offering of less than a majority of the subsidiary's shares.

The proceeds from the offering would be used to reduce the company's outstanding debt of $2.3 billion, Sinclair said.

"A lot of [Sinclair's] value now is hidden within the radio group," said David B. Amy, chief financial officer.

If all pending transactions are completed as planned, Sinclair will own or program 51 radio stations in 10 separate markets and 59 television stations in 39 markets.

It is the television properties that have won the most attention for Sinclair, which has developed a national profile by becoming a big holder of TV stations affiliated with upstart networks such as Fox, UPN and the WB Network. In Baltimore, Sinclair owns Fox affiliate WBFF-TV Channel 45 and programs the WB Network's WNUV-TV Channel 54.

Leland Westerfield, an analyst with PaineWebber Inc. in New York, said Sinclair's radio properties are overshadowed by its TV stations. "I think most investors know Sinclair as a pure-play TV operator," Westerfield said.

By splitting off its radio assets, Westerfield said, Sinclair could unlock their neglected value. "Right now, it's fairly clear the Sinclair stock [price] doesn't recognize the smaller but still-valuable radio properties," he said.

The acquisition campaign that turned Sinclair into a TV industry player also burdened the company with large debts. It has been challenged further by slowdowns in the national advertising market.

Bloomberg News contributed to this article.

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