Tue, May 02, 2017 - Page 10 News List

Blackstone, 21st Century Fox eye Tribune Media

NY Times News Service, New York

Mass-media company 21st Century Fox Inc is in talks with Blackstone Group LP, the giant investment firm, to make an offer for Tribune Media and its stable of TV stations, people briefed on the negotiations said on Sunday night, a move that would potentially forestall a rival bid for Tribune.

The move by Fox and Blackstone is aimed at not only bolstering Fox’s TV portfolio, but also beating an offer by Sinclair Broadcast Group Inc, the US’ biggest station operator, before a bidding deadline this week.

The people briefed on the talks spoke on condition of anonymity because negotiations are continuing.

Under the terms of the potential arrangement, Blackstone would contribute cash to the venture, while 21st Century Fox, the huge entertainment company run by the Murdoch family, would contribute its 28 owned-and-operated stations.

Representatives of 21st Century Fox and Blackstone declined to comment on their talks, which were reported earlier by Bloomberg News and the Financial Times.

Tribune, which was formed when its parent company divided its TV and its print media holdings into two separate companies, owns 42 stations — and has the most Fox affiliates of any station owner. As of Friday, the company’s market value was about US$3.2 billion.

The surge of interest in Tribune comes after the US Federal Communications Commission (FCC) last week decided to change regulations governing station ownership.

The FCC’s move to reinstate the so-called ultra-high-frequency (UHF) discount — backed by the agency’s two Republican commissioners and opposed by its sole Democratic one — essentially loosened rules limiting how many stations a single operator could own, though companies are still forbidden to cover more than 39 percent of US households.

The discount allowed broadcasters to include only half of their stations broadcasting on UHF toward ownership limits.

Bringing back the discount, analysts have said, all but guarantees new efforts at consolidating the TV industry even further.

Broadcasters, including Tribune, praised the FCC’s decision as one that lets them become more competitive with rival service providers such as cable and satellite companies.

“Today’s action by the Federal Communications Commission is a welcome step toward creating a more level playing field for all local broadcasters in their relationships with TV networks, satellite operators, cable providers, and streaming video services,” Tribune said in a statement last week.

The expected return of the UHF discount under US President Donald Trump’s administration was what led companies such as Sinclair, which has 173 stations, and Fox to weigh bids for Tribune. Other broadcasters are said to be considering takeover offers for Tribune as well.

FCC chairman Ajit Pai, a Republican, has hinted that he is open to further deregulation of TV station ownership.

For Fox, blocking Sinclair’s bid for Tribune would eliminate the creation of a more formidable opponent when negotiations for broadcasting fees occur.

Fox, embattled by sexual harassment scandals at its Fox News cable network, has been working to shore up its TV empire in other ways. It is waiting for British regulatory approval to buy full control of Sky, the British satellite TV giant in which it owns a 39 percent stake.

Two weeks ago, that pursuit was delayed by the British communications regulator as it continues to review whether the combined company would be “fit and proper” to hold a broadcasting license.

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