MW Sinclair makes a move for Scripps as Trump's deregulation push makes previously unthinkable deals possible

By Lukas I. Alpert

The FCC has moved to loosen restrictions on local TV ownership, and remove caps on how many TV stations one company can own, which could pave the way for a Sinclair-Scripps merger

Sinclair Inc. is seeking to take advantage of a loosening regulatory environment by making a bid to buy smaller rival E.W. Scripps. Co.

There may never be a better time to buy a local TV company.

Amid broad promises of deregulation by the Trump administration, the Federal Communications Commission is moving to loosen long-held restrictions on local television ownership, paving the way for mergers among station groups that would previously have been thought impossible.

On Monday, Sinclair Inc. $(SBGI)$ moved to take advantage of the changing political environment, announcing that it had taken an 8.2% stake in smaller rival E.W. Scripps Co. $(SSP)$ after months of quiet, but so far unsuccessful, merger talks.

Sinclair said it acquired the stake "in contemplation of a possible combination," or merger, with the company.

The announcement, made in a filing to the Securities and Exchange Commission, sent shares of Scripps soaring over 30% in recent afternoon trading on Monday. Sinclair shares rose more than 4% toward an eight month high.

There are few spaces in American business where mergers are more highly regulated than broadcast television, with many rules preventing too much consolidation and control by a single company in any given market having stood for decades.

But among the many areas where the Trump administration has promised to loosen such rules, few of the proposed changes have been as sweeping as those made by the FCC.

In late September, the FCC voted to reconsider several longstanding rules prohibiting mergers among the four big broadcast groups and rules barring ownership of more than two of the four largest television stations in any market.

FCC Chairman Brendan Carr has also said he wants to remove caps limiting the number of stations any one company can own.

"We intend to take a fresh approach to competition by examining the broader media marketplace, rather than treating broadcast radio and television as isolated markets," Carr said in September. "If we determine that any rule no longer serves the public interest, we will fulfill our statutory duty to modify or eliminate those rules."

In August, Sinclair's rival, Nexstar Media Group Inc. $(NXST)$, presented the first major challenge to the old rules, when it announced an agreement to acquire Tegna Inc. (TGNA) for $6.2 billion.

The deal, if approved, would create a broadcasting behemoth in control of 265 stations in 44 states, allowing it to reach more than 80% of all households in the U.S.

As it stands, FCC rules set a limit of 39% for the percentage of households that any one broadcast company is allowed to reach in the U.S., as well as limits to the number of stations a company can own in a single market.

The FCC also allows for something called the ultra-high-frequency (UHF) discount, which lets stations that broadcast with historically less reliable UHF systems count only 50% of their audience. That means, in theory, a company operating only UHF stations could own channels that reach 78% of U.S. households.

Carr has called those limits "arcane" and "artificial," and has argued that they put local station owners at a disadvantage compared with companies like Netflix Inc. $(NFLX)$ and Alphabet Inc.'s $(GOOGL)$ $(GOOG)$ Google and YouTube, which operate under no such limitations. The National Association of Broadcasters has also argued that the rule should be changed.

Opponents have argued that the law clearly states that specific rule cannot be changed by the FCC itself but only by an act of Congress.

The potential pitfalls of needing Trump administration action to allow consolidation came to the fore in September when both Nexstar and Sinclair moved to pull Jimmy Kimmel's late-night show off their ABC affiliates under pressure from the administration following comments he made about the death of conservative activist Charlie Kirk.

If the Nexstar-Tegna deal goes through, it would push Nexstar well ahead of its nearest rival Sinclair in terms of the number of stations owned. Sinclair admitted that part of its motivation was to keep pace with consolidation among its rivals.

"Recent industry consolidation and intensifying competition reinforce [our] view that 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," Sinclair stated in its filing with the SEC.

Sinclair shares have gained 3.4% in 2025, while Nexstar's stock has rallied 16.6% and the S&P 500 index SPX has advanced 13%.

In a statement, Scripps said it was reviewing its options.

"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," Scripps said. "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."

Analysts said they believe that Sinclair's acquisition of the 8.2% stake in Scripps is intended to pressure its smaller, family-controlled rival to make a deal.

"Given that the Scripps family has voting control over Scripps' stock, we think the move is intended to put more public pressure on Scripps to consummate a merger," Daniel Kurnos at Benchmark Research wrote in a note to clients.

"We also think it shows how committed Sinclair is to forcing through some sort of transaction in the marketplace, although it does highlight a feeling of need that Sinclair has to enact some sort of deal, especially in light of the pending Nexstar-Tegna tie-up," he added.

-Lukas I. Alpert

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

November 17, 2025 15:27 ET (20:27 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.