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Sinclair Broadcast Group, Inc.
announced today that it has submitted the attached letter to
the Federal Communications Commission in order to meet certain objections the
FCC has to shared services agreements in particular and to shared agreements
generally which are coupled with a contingent financial interest, such as a
guarantee or an option.
If the proposed restructuring is approved, Sinclair will sell certain stations
it currently owns to parties other than the parties who were originally
contemplated to buy these stations, and following the sale will not provide
any services to such stations. The stations to be sold are WHP, the CBS
affiliate in Harrisburg, Pennsylvania, WMMP, the MyNetwork affiliate in
Charleston, South Carolina and WABM, the MyNetwork affiliate in Birmingham,
Alabama; Sinclair would also discontinue providing services to WTAT, the FOX
affiliate in Charleston and would transfer to the buyer of WHP, the rights
under an existing LMA to provide services to WLYH, the CW affiliate in
Harrisburg. In each of these three markets, Sinclair is buying the ABC
affiliate from Allbritton. Sinclair would retain ownership of WTTO, the CW
affiliate in Birmingham.
"The proposed changes to the transaction will have an immaterial impact on
Sinclair as a whole and on the Allbritton transaction in particular,"
commented David Smith, Sinclair's President and Chief Executive Officer.
"Although we believe the shared services arrangements that were contemplated
would have provided significant public interest benefits, including promoting
minority ownership of broadcast stations," Mr. Smith continued, "even without
such arrangements the Allbritton transaction will result in significant
upgrades for Sinclair in each of these three overlap markets. Moreover, these
markets were always a very small part of the Allbritton acquisition, which was
driven to a much larger extent by their ABC affiliated station and 24-hour
cable news channel in Washington, D.C. The stations to be sold were expected
to contribute only approximately $21 million of pro forma EBITDA in 2014, and
we expect to realize full value for the stations in a sale. In addition, the
sale of these stations will only reduce the previously announced $21.5 million
of operating synergies created in the Allbritton transaction by $2 million."
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