Sinclair Held Talks for Tennis Channel
September 21 2015 - 4:40PM
Dow Jones News
Tennis anyone?
Sinclair Broadcast Group, the nation's largest owner of local TV
stations, has had talks to buy the closely-held Tennis Channel,
according to people familiar with the situation.
The on-again, off-again discussions have taken place over the
last several months between Sinclair and private equity firms
Apollo Global Management, Bain Capital Ventures, Battery Ventures,
CCMP Capital and Columbia Capital, which are the majority owners of
the Tennis Channel. Satellite broadcasters DirecTV and Dish Network
Corp. also own small stakes in the network.
The talks are a sign of the increasing pressures on independent
cable channels like the Tennis Channel to bulk up amid
consolidation among pay-TV distributors who carry their
programming. In addition, Tennis Channel competes with much bigger
companies including Walt Disney Co.'s ESPN for sports rights.
For Sinclair, which would have a difficult time adding more TV
stations to its portfolio without running afoul of a regulatory
ownership cap, buying the Tennis Channel would offer a way to
diversify its holdings and control more content, the people
familiar with the talks said. Currently, Sinclair's stations are
beholden to the major broadcast networks like NBC, CBS, Fox and
ABC, which supply their most valuable content.
The Tennis Channel, which is available in about 35 million
homes, has considered a sale for some time. However, finding
someone willing to pay the premium its private equity owners are
seeking has proved challenging. Its owners are seeking a price
north of $500 million, a person with knowledge of the matter
said.
A Tennis Channel spokesman declined to comment on what he
characterized as speculation. Sinclair did not respond to requests
for comment.
While the discussions between Sinclair and Tennis Channel are
preliminary, the Baltimore-based broadcaster is clearly interested
in growing beyond its roots. It owns a local news cable channel in
Washington, D.C. and Tennis Channel was just one of several other
cable channels Sinclair has looked at.
Sinclair owns or operates 164 television stations in 79 markets,
including affiliates of ABC, CBS, Fox and NBC, giving it strong
leverage in negotiations with pay-TV providers for carriage fees.
This leverage could potentially help expand the footprint of the
12-year-old Tennis Channel, which to date has largely been
relegated to a sports tier in pay TV packages.
However, that may prove challenging. Pay-TV distributors are
pushing back against so-called bundling of channels and consumers
are frustrated with growing bills for networks they don't
watch.
Sinclair's plans to acquire a national cable channel came to
light last month, in the course of a distribution fight with Dish
Network. In explaining the brief blackout that left 5 million Dish
customers without Sinclair stations, Dish said it had come to terms
with Sinclair on fees to carry its TV stations but the broadcaster
was holding out to get distribution for a cable channel it does not
yet own.
Sinclair signaled its interest in investing in sports television
last year with the formation of American Sports Network, a
subsidiary that syndicates high school college sports content
across both its owned stations and beyond.
Write to Keach Hagey at keach.hagey@wsj.com and Joe Flint at
joe.flint@wsj.com
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(END) Dow Jones Newswires
September 21, 2015 16:25 ET (20:25 GMT)
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