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Fox Said Approached to Thwart Possible Tribune-Sinclair Deal

Updated on
  • Sinclair would own 28% of Fox’s affiliates with merger
  • Nexstar is also said to consider a takeover bid for Tribune

21st Century Fox Inc., the media conglomerate controlled by Rupert Murdoch, is weighing options to help thwart a potential takeover of Tribune Media Co. by Sinclair Broadcast Group Inc., people familiar with the situation said.

Fox is deliberating over possible choices after having been approached by several parties, which are interested in acquiring Tribune directly or as part of a consortium, said the people, who asked not to be identified because the talks are private. One of the parties that has talked with Fox is activist investor Starboard Value LP, which owned a 4.4 percent stake in Tribune as of March 15.

While Sinclair recently approached Tribune about a possible merger, the companies aren’t close to a deal, other people familiar with the matter said. Nexstar Media Group Inc. is also weighing a bid, although it hasn’t hired a financial adviser yet, the people said. Nexstar has a history of laying in wait for a potential deal, striking an agreement to acquire Media General Inc. in 2015 only after Media General had announced plans to merge with Meredith Corp.

While some of the parties eyeing Tribune are interested in teaming up with Fox for a bid, Fox doesn’t want to acquire the broadcaster, the people said. Murdoch’s company may ultimately decide not to intervene at all, the people said.

A combination of Tribune and Sinclair, two of the country’s biggest TV station owners, would give Sinclair control of 28 percent of the Fox-affiliated channels that Murdoch’s company doesn’t own directly, the people said. That would give Sinclair a stronger negotiating hand in future talks with Fox about how to split fees from cable providers, the people said.

Several large media companies, including CBS Corp. and Sinclair, are up against U.S. rules that limit the reach of station owners to 39 percent of the country and need reform from the Federal Communications Commission if they want to expand geographically.

Fox holds some sway over Tribune’s destiny because it has to consent to the transfer of the company’s affiliate agreements to a new owner in the event of a takeover, two of the people said.

Fox Chief Executive Officer James Murdoch recently told investors that his company was unlikely to look to acquire more TV stations if the FCC regulations were relaxed under the new administration.

Tribune Media shares rose less than 1 percent to $37.45 at 9:40 a.m. in New York Friday.