inclair Broadcast Group is selling WGN-TV to a Maryland auto dealer but would remain in control of the station in what critics say is a bid to skirt ownership limits and win federal regulatory approval for its proposed $3.9 billion acquisition of Tribune Media.
That means “Terrorism Alert Desk” and other programming staples of politically conservative Sinclair may yet be headed to Chicago’s airwaves.
Under the terms of the $60 million station sale, filed Wednesday with the Federal Communications Commission, Sinclair would provide everything from programming to advertising sales to the buyer, essentially running WGN-Ch. 9 through a services agreement.
The licensee of WGN would be a newly formed company headed by Steven Fader, a longtime business associate of Sinclair Executive Chairman David Smith. Sinclair will have an option to buy back the station for the same price, subject to adjustments, within eight years.
The services agreement puts Sinclair in charge of advertising sales and gives it the right to provide local news and other programming to WGN. Sinclair would keep 30 percent of all ad sales and receive a $5.4 million monthly service fee for operating the station during the first year, with annual increases and performance bonuses.
Fader is CEO of Atlantic Automotive Corp., a Towson, Md.-based auto dealership group in which Smith holds a controlling interest, according to Sinclair financial statements. Fader also is chairman and co-founder of private equity firm Atlantic Capital Group.
He could not be reached Thursday for comment.
Hunt Valley, Md.-based Sinclair agreed to buy Chicago-based Tribune Media in May, creating what would be the largest ownership group in the U.S., with 233 TV stations, before any required divestitures. The deal has been facilitated by the FCC’s easing of ownership restrictions last year, but the combined company would still exceed a 39 percent cap in national audience reach.
Sinclair announced last week that it would sell Tribune stations WGN and WPIX-TV in New York, as well as stations in nine other markets, to get under the ownership cap.
On Wednesday, Sinclair filed a similar application to sell WPIX to Cunningham Broadcasting Corp. for $15 million, with an option to buy it back, and an agreement to provide advertising sales and programming to the station.
Cunningham Broadcasting is owned by the estate of Carolyn Smith, the mother of the Sinclair chairman.
It remains to be seen whether such an ownership workaround passes muster with federal regulators, including the FCC and the Department of Justice.
