By Staff
TVNewsCheck,
Plunging deeper into programming, Sinclair Broadcast Group has signed a definitive agreement to buy The Tennis Channel for $350 million, the station group announced Wednesday afternoon.
Sinclair said that it has already signed distribution agreements with MVPDs that will stretch the network's household reach from 30 million homes to 50 million.
Sinclair said the purchase price is partially offset by the network's $200 million in net operating losses, which Sinclair will be able to carry forward to reduce its taxes and save it around $65 million.
The deal is subject to regulatory approval and is expected to close by the end of March.
“Tennis Channel is an established property with high-quality content and advertisers, and is vastly under-compensated and under-distributed relative to the value it brings to its viewers. It was the only independently-owned major sports network left, and we knew we could unlock value through a tuck-in acquisition,” said Sinclair CEO David Smith.
“The additional subscriber base, which has already been contracted, equates to the creation of approximately $200 million of incremental value at closing," Smith added. "Furthermore, we expect this combination to create additional linear and OTT viewership and advertising growth, and we have the added benefit of the continued involvement of Ken Solomon, CEO of Tennis Channel, and a seasoned programming executive.”
"We also expect to leverage our broadcast platform to promote Tennis Channel, which we anticipate will result in increased viewership, further adding to the channel’s value in attracting and retaining subscribers,” Faber added.
Solomon called Sinclair the "perfect" partner. “The larger platform will immediately help develop incremental advertising and sponsorship business and puts us in a great position to enhance our already comprehensive rights portfolio domestically, as well as develop the brand internationally.
Sinclair said that it has already signed distribution agreements with MVPDs that will stretch the network's household reach from 30 million homes to 50 million.
The deal is subject to regulatory approval and is expected to close by the end of March.
“Tennis Channel is an established property with high-quality content and advertisers, and is vastly under-compensated and under-distributed relative to the value it brings to its viewers. It was the only independently-owned major sports network left, and we knew we could unlock value through a tuck-in acquisition,” said Sinclair CEO David Smith.
“The additional subscriber base, which has already been contracted, equates to the creation of approximately $200 million of incremental value at closing," Smith added. "Furthermore, we expect this combination to create additional linear and OTT viewership and advertising growth, and we have the added benefit of the continued involvement of Ken Solomon, CEO of Tennis Channel, and a seasoned programming executive.”
Sinclair EVP Barry Faber added that "nothing is more valuable to video distributors than high-quality, live sports, and we expect the increased carriage of Tennis will be well-received by their subscribers.
Solomon called Sinclair the "perfect" partner. “The larger platform will immediately help develop incremental advertising and sponsorship business and puts us in a great position to enhance our already comprehensive rights portfolio domestically, as well as develop the brand internationally.
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