Sinclair Broadcasting took the first step toward what it hopes will be the takeover of competitor E.W. Scripps. On Monday morning, Sinclair filed paperwork with the Securities and Exchange Commission revealing it had purchased 8% — about $15.6 million — of Scripps stock.
Scripps responded with a tepid statement that sounded more like a defense against a takeover than an invitation to merge:
The company’s board has and will continue to evaluate any transactions and other alternatives that would enhance the value of the company and would be in the best interest of all company shareholders. Likewise, the board will take all steps appropriate to protect the company and the company’s shareholders from the opportunistic actions of Sinclair or anyone else.
While it is not the typical first move in a media meger, the purchase comes at a pivotal time. The Federal Communications Commission is expected to decide soon whether to relax rules that limit how many television stations one company could own. A change in those rules would allow suitors to make these kinds of mega-takeovers.
Sinclair said in its filing that it has been in discussion with Scripps “for several months regarding a potential combination of the two companies.” The filing also noted that Scripps would retain its existing debt — a significant detail in an industry facing soft advertising markets and steadily declining viewership for traditional TV.
This is the second attempted large-scale TV consolidation in recent months. In August, Nexstar announced it would buy Tegna for $6.2 billion. Sinclair signaled at the time that it, too, was interested in Tegna, but Nexstar’s deal was already sealed.
Both takeover efforts hinge on the FCC lifting its rule that limits a company’s station ownership to 39% of U.S. households. Sinclair and Nexstar have aligned themselves with the Trump administration, which holds the power through the FCC commissioners to scuttle takeovers. Both companies recently refused to air “Jimmy Kimmel Live!” on their 70 ABC-affiliated stations over Kimmel’s comments about the assassination of Charlie Kirk.
Critics have long accused Sinclair of being overly friendly with President Donald Trump. In 2018, Trump publicly defended the broadcaster after it ordered its nearly 200 stations to air scripted commentaries alleging other media companies were biased.
In this week’s SEC filing, Sinclair argued that consolidation is essential to compete with other media sources. “Further scale in the broadcast television industry is essential to address secular headwinds and compete effectively with larger-scale big-tech and big-media players, as well as major broadcast groups,” the company wrote. Sinclair claimed that a merger with Scripps would improve its ability to compete for advertising, programming and distribution, and strengthen its capacity to produce local news.
Revenue swings and declines
Sinclair had a rough third quarter. Even while the station is making several smaller-scale deals, its Nov. 5 earnings release showed revenue was down 16% year over year, with overall advertising revenue falling 26%. The company blamed the spat on the Kimmel blackout as well as the distribution standoff between Disney and YouTube TV, which temporarily disrupted local station feeds for subscribers.
Big revenue swings between election-cycle years and years like 2025, when political advertising is scarce, are both predictable and unsettling for broadcasters. Stations have to hope that political campaigns will continue buying television ads in 2026, even as audiences drift to other sources and the industry becomes harder to predict.
Sinclair COO and president of local media Robert Weisbord recently told investors that the company expects 2026 political advertising revenue to match its 2022 midterm record of $333 million. Sinclair and Nexstar are betting that the FCC will lift ownership caps soon enough for them to capitalize on the next big revenue cycle, which includes the 2026 midterms and major sports programming. In addition to election spending, broadcasters are counting on strong ratings and ad sales from the FIFA World Cup, the Winter Olympics and a full year of NBA games returning to NBC stations. Local broadcasters are also eyeing the return of the college football national championship to over-the-air ABC in 2027.
E.W. Scripps, meanwhile, reported a 27% drop in local media revenue in its Nov. 7 earnings call, attributing the downturn to the same off-cycle dynamics. The company forecast an even bigger drop for the fourth quarter compared to 2025. The company’s stock took a pounding after the earnings call but rebounded somewhat on the news of Sinclair’s attempted takeover.
Are TV news audiences moving on?
A recent Pew Research study found that large broadcast groups like Sinclair, Scripps, Nexstar and Tegna face headwinds from streaming services like Netflix. Pew reported, “Compared with those who watch streaming, far fewer Americans (36%) say they subscribe to cable or satellite TV at home. Americans ages 65 and older are most likely to say they subscribe to cable or satellite, at 64%. Smaller shares of those 50 to 64 (44%), 30 to 49 (23%) and 18 to 29 (16%) say the same.”
Beginning in 2026, Sinclair said it will stop issuing quarterly earnings guidance and instead report annually. The change reflects the roller-coaster revenue pattern that station owners face between election cycles, expiring carriage agreements with cable providers, and more recent disputes over distribution through online carriers such as YouTube TV.
When will the FCC rule?
During Sinclair’s earnings call on Nov. 5, CEO and president Christopher Ripley said he expects the FCC “may raise or eliminate the 39% nationwide ownership cap in the first half of 2026.”
E.W. Scripps President and CEO Adam Symson told investors two weeks ago that he also anticipates action soon. “I fully expect that the FCC will take action on the prohibition against groups like ours owning two stations in two big fours in one market,” he said. “That now should be fairly simple and quick. The FCC will move forward, I believe, on eliminating the national cap.”
He added, “I would be very surprised if it took beyond the middle of next year. I think Chairman Carr is committed and doesn’t waste a lot of time.”
