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DOJ Rejects Sinclair's Purchase of WTVR

The antitrust division nixes Sinclair $85-million deal to buy the Richmond CBS affiliate from Raycom Media, citing a consent decree that the division entered into with Raycom when it purchased three stations from Lincoln Financial earlier this year.
By
TVNewsCheck,

The Department of Justice has rejected Sinclair Broadcast's planned $85 million purchase of WTVR Richmond, Va., from Raycom Media.

According to Sinclair, the DOJ acted pursuant to a consent decree that Raycom entered into with the DOJ when it purchased three stations from Lincoln Financial earlier this year.

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The decree empowered the DOJ to reject unilaterally any deal involving WTVR.

A DOJ spokeswoman declined to comment on the matter.

Sinclair had hoped to set up a virtual CBS-Fox duopoly in Richmond, the 59th largest TV market.

In June 2008, when Sinclair announced that it had agreed to buy WTVR, a CBS affiliate, it also said it would sell its existing Fox affiliate in the market, WRLH, to Carma Broadcasting.

But, under an agreement with Carma, Sinclair said it would have provided sales and other non-programming related services to WRLH and operated it in tandem with WTVR.

Sinclair said that it believes that the proposed transaction would not have violated the antitrust laws.

"This situation, however, is unique because of the unilateral power held by the Justice Department under the consent decree into which Raycom had previously entered as part of a separate transaction," Sinclair said.

In light of the DOJ action, Sinclair said the purchase of WTVR and sale of WRLH will not occur and that it is "continuing to explore its rights under its asset purchase agreement with Raycom."

Raycom purchased all three stations of the Lincoln Financial Group -- WBTV Charlotte, N.C. (CBS, DMA 25); WWBT Richmond, Va. (NBC); and WCSC Charleston, S.C. (CBS, DMA 100) -- as well as its sports syndication business for $583 million in cash.

To comply with FCC rules barring ownership of two top-rated station in markets as small as Richmond, Raycom decided to spin off its existing Richmond station, WTVR.

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