By Joe Flint

One of the biggest stories in tennis isn't happening at the U.S. Open.

Ken Solomon, longtime chairman and chief executive of the Tennis Channel, has been relieved of his duties by parent company Sinclair Inc., people familiar with the matter said.

The shake-up won't affect Sinclair's plans to sell the channel, people involved in that effort said.

In communications with Solomon, Sinclair executives cited his involvement in activities not related to the Tennis Channel as cause for his departure. Specifically Sinclair took issue with Solomon's role as a board member and an adviser for Dr. Phil McGraw's company, Merit Street Media, as a growing distraction, the people said.

Solomon has been told his last day with the network is Sept. 9.

People close to Solomon said he has held similar outside roles during his tenure with the Tennis Channel without objection from Sinclair and received approval from the company for his role with McGraw's company, which officially started in late 2023. People familiar with Sinclair's thinking countered that Solomon's role with McGraw had become more active and time-consuming than they had anticipated.

Sinclair also indicated to Solomon it wanted a commitment from him to work primarily in the Tennis Channel's Santa Monica, Calif., offices. Solomon recently acquired property in the Dallas area. The people close to Solomon said it is a horse ranch for his wife. McGraw's operations are also based in Dallas-Fort Worth.

While tennis has normally lagged behind other major sports, it attracts an audience of high median income that is appealing to advertisers, similar to golf. The sport is having a moment in the U.S. with Jessica Pegula in the Women's final at the U.S. Open, and many other American players, including Emma Navarro, Frances Tiafoe and Taylor Fritz, going deep in the tournament.

The ousting of Solomon comes at an awkward time as Sinclair has been shopping the Tennis Channel for a potential sale. Maryland-based Sinclair is one of the largest owners of local television stations in the United States. It also owns several digital networks and has a stake in the YES Network, the regional sports network that carries the New York Yankees. Diamond Sports, a regional sports-network operator that is going through bankruptcy proceedings, is a subsidiary of Sinclair.

Sinclair Chairman David Smith also separately owns the Baltimore Sun newspaper.

Earlier this year Sinclair retained investment bank Moelis to shop the Tennis Channel along with a significant chunk of the company's local television stations. Solomon has been very involved in the sales process, working closely with Moelis on presentations and meeting with potential suitors, the people familiar with the situation said. Sinclair valued the network at about $750 million in 2022.

Solomon and some senior executives on his team have stakes in the channel and stand to profit from a sale.

People close to the sales process said it is continuing and a deadline for final bids will be set in the coming weeks.

Solomon has run the channel since 2005. Sinclair acquired the Tennis Channel in 2016 from several private-equity funds for $350 million. His leadership has helped boost the global popularity of the sport.

"Ken is the Tennis Channel," said Micky Lawler, who headed the Women's Tennis Association for nearly a decade. Lawler also credited Solomon with embracing new platforms such as the subscription-streaming service Tennis Channel Plus and advertiser-supported streaming service T2. "He is always ahead of the curve, I just can't imagine not having him there, " she said.

When Sinclair bought the channel it had earnings before interest, taxes, depreciation and amortization in the $15 million to $20 million range. According to material from Moelis, Tennis Channel is expected to have Ebitda of $137 million this year and revenues of $325 million.

The monthly fee Tennis Channel charges distributors is 45 cents per subscriber. Some 35 million homes in the U.S. subscribe to TV bundles that include the Tennis Channel.

Legendary player and Tennis Channel commentator Martina Navratilova said Solomon's "level of passion is only matched by his business acumen and vision for the future."

Sinclair has had challenges with its other businesses, including its local TV station operations. Like most broadcasters, it has suffered rating declines and greater competition for advertising from streaming services. Sinclair has been seeking to sell as many as 60 of its 185 TV stations.

Earlier this year, Sinclair also agreed to pay $495 million to settle a legal battle with Diamond Sports. Diamond had alleged that Sinclair took $1.5 billion out of the company before it filed for bankruptcy. Sinclair denied the allegations.

Write to Joe Flint at Joe.Flint@wsj.com

(END) Dow Jones Newswires

September 06, 2024 17:06 ET (21:06 GMT)

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