Sinclair/Tribune Fall Out

Yesterday's FCC announcement about the potential downfall of the Sinclair/Tribune merger rocked the market. From Tom Taylor's NOW column...

Stocks tank for Tribune and Sinclair. Particularly Tribune, whose board enthusiastically backed the $3.9 billion merger and may not have a Plan B. Stock in Tribune (“TRCO”) plummeted 16.7% yesterday, down $6.44 a share to $32.12. Trading volume was a rollicking 15 times the average. Sinclair was down nearly 12%, off $3.85 a share to $29.10, on five times the typical volume. The damage could go even further. The June 20 NOW quoted one observer saying that due to “the clumsy way it’s handling the Tribune deal,” Sinclair has “kind of screwed this ownership thing up for radio.” If the outcry grows too loud over Sinclair swallowing up Tribune to become the largest TV station operator, the backlash could be felt in the effort to relax the radio ownership rules. (Something we believe FCC Chair Pai wants to do, and told industry leaders about at the April NAB Show.) And a reminder that short-term, the fate of Tribune’s only radio station, Chicago’s talk WGN/720, hangs on the balance. (Folks in Chicago are fearful about Sinclair.)