Sinclair Makes It A Triopoly In Baltimore
For years, Fox Television Stations' WUTB Baltimore gave Fox considerable leverage in its sometime contentious affiliation negotiations with Sinclair Broadcast Group.
If Sinclair ever got out of line, Fox could threaten to yank its affiliation from Sinclair's flagship station WBFF Baltimore and move it to WUTB.
But last May, Fox relinquished that leverage when it extended its affiliation with WBFF and 18 other Sinclair stations for five years starting Jan. 1, 2013, and granted Sinclair an option to buy WUTB.
Sinclair is now exercising that option by assigning it to a third party, Deerfield LLC.
According to an FCC filing seeking approval of the deal, Deerfield is buying WUTB and allowing Sinclair to run the MNT affiliate through joint sales and shared services agreements.
The deal gives Sinclair a virtual triopoly in Baltimore where it also operates CW affiliate WNUV, which is owned by Cunningham Broadcasting, Sinclair's longtime duopoly partner that is controlled by trusts for the children of Sinclair's controlling shareholders.
FCC rules prohibit a single broadcaster from owning outright more than one full-power station in Baltimore.
Deerfield is paying $2.7 million for WUTB, according to the FCC filing.
But that price may not reflect the full value of WUTB. In the May affiliation extension, Sinclair agreed to pay Fox $25 million for the WUTB option and the Fox affiliation in Baltimore. (Sinclair is obliged to pay Fox another $25 million unless Fox exercises options to acquire certain Sinclair stations, according to Sinclair.)
At the time of the May agreement, Sinclair CEO David Smith said the option for WUTB was "privotal" to the overall deal.
"Our Fox affiliate in Baltimore is one of our most important television assets, and over the years the station has built a strong local brand. We believe that this affiliation was at risk, and negotiated with Fox to acquire the option to purchase ... WUTB ... in hopes that acquiring this station would solidify WBFF's position as a Fox affiliate in Baltimore in the long term."