Sinclair selling 2 Ind. TV stations

Sale allows Tribune Co. to form its fourth city duopoly in Indianapolis

$125 million cash deal

April 20, 2002|By Andrea K. Walker | Andrea K. Walker,SUN STAFF

Sinclair Broadcast Group Inc. announced yesterday that it is selling two Indiana television stations - WTTV in Indianapolis and WTTK in Kokomo - to Chicago-based Tribune Co. for $125 million in cash.

The transaction allows Tribune, which owns The Baltimore Sun Co., to form a duopoly, where a company owns or operates more than one television station in a city. Tribune owns WXIN in Indianapolis.

Officials with Hunt Valley-based Sinclair said they decided to sell because they couldn't create their own duopoly.

"Tribune wasn't willing to sell their station, and nobody else in the market was willing to sell their stations either," said David Amy, Sinclair executive vice president and chief financial officer.

Like many broadcast companies, Sinclair began focusing its business strategy on markets where it can own two stations when the Federal Communications Commission lifted restrictions on such ownership in 1999. The company will own, operate or provide programming and sales service to 61 television stations in 39 markets when the transaction with Tribune is complete.

"We were a single station in Indianapolis," he said. "It's such a competitive environment, and we were able to dispose of it in an economical manner."

The deal creates the fourth duopoly for Tribune, which bought Fox affiliate WXIN in 1997. WTTV is an affiliate of the WB network, and WTTK is a "satellite" of WTTV, showing the same programming. Tribune also owns two stations in New Orleans, Seattle and Hartford, Conn.

"By creating a two-station cluster in Indianapolis we have immediate opportunities to reduce costs and improve revenue, which makes the purchase price very attractive in today's environment," Tribune President and Chief Operating Officer Dennis FitzSimons said in a statement.

Tribune raised money for the Sinclair deal by selling two Denver radio stations to Entercom Communications Corp. Tribune, which owns and operates 23 major-market television stations, raised about $180 million through that transaction, said Gary Weitman, Tribune vice president for corporate communications.

The deal is subject to approval by the Department of Justice and the FCC, but is expected to close as early as the third quarter. Sinclair's shares slipped 29 cents yesterday to close at $13.31. Tribune's shares gained $1.87 to close at $46.95.

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