Scripps Says It Will Take Steps To Ward Off “Opportunistic” Sinclair Amid Pressure By Bigger Broadcaster

E.W. Scripps is not loving the latest move by larger rival Sinclair, which revealed earlier Monday that it acquired an 8.2% stake in the smaller broadcaster on the open market and wants to own it as the industry continues to consolidate.

In response, Scripps said its “board will take all steps appropriate to protect the company and the company’s shareholders from the opportunistic actions of Sinclair or anyone else.”

“Scripps’ board of directors and management are focused on driving value for all of the company’s shareholders through the continued execution of its strategic plan. The board and management are aligned on doing only what is in the best interest of all of the company’s shareholders as well as its employees and the many communities and audiences it serves across the United States,” Scripps’ statement said. “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.”

A Scripps rep declined comment beyond the statement.

Sinclair noted in an SEC filing that it held “constructive” merger talks with Sinclair for several months. A source told Deadline that talks between Sinclair and Scripps ended with no transaction.

Scripps surged 40% on Monday after Sinclair’s revelation that it had acquired 6.275 million shares and said it believes that if an agreement can be struck, a deal could close in nine to 12 months.

Sinclair also made the case for a combination, including $300 million in annual cost savings, reduced leverage, and further scale as competition intensifies. The nation’s largest station owner Nexstar signed a mega-deal in August to acquire broadcaster Tegna. Scripps is the third largest operator of ABC affiliates behind Sinclair and Nexstar.

SEC rules require Sinclair to reveal its holding in Scripps, but not to explain in detail why it took the position.

“The biggest hurdle we see to completing a SBGI/SSP combination are social issues (family control, pro forma ownership structure, and Board representation),” Sinclair said in the filing, referring to the stock symbols for the two publicly traded companies, and longtime ownership by the founding Scripps family.

Wall Street analysts asked Scripps CEO Adam Symson about M&A on an earnings call this month. He noted “significant opportunities to buy, sell and swap stations,” as it’s been doing, as well as looking at bigger deals. “There’s no question that transformational M&A at this moment can be really accretive, in addition to the work we’re doing with optimizing our portfolio, and we’ll continue to operate in that marketplace.”

Asked about the family’s role in such decisions, he said: “I don’t speak for our controlling shareholders. This is a management-led process. Obviously, our Board of Directors is very, very involved. And then from there, we bring the Scripps family in. I can reiterate what I’ve said before [that] over the long history of this company, the family has always acted in the best interest of all shareholders and is committed to doing what is best for the company, that creates the greatest shareholder value.

“Look, just to be very, very clear, this isn’t some kind of hobby for the Scripps family. This is a business. It’s an investment, and it’s their American legacy, and I know they are committed to doing what creates the greatest value for all shareholders.”