Sinclair Broadcast Group plans to reorganize its business and change its name to Sinclair Inc., the Hunt Valley-based television station owner said Monday.
A newly created holding company called Sinclair would become the publicly traded parent of Sinclair Broadcast and its subsidiaries, which include the struggling Diamond Sports Group, which owns regional sports networks and airs games for 14 MLB teams.
Diamond Sports filed for bankruptcy protection just over two weeks ago, burdened by more than $8 billion in debt.
Sinclair Broadcast has been best known as a television broadcaster, but the company and its affiliates also own, manage and or operate a range of businesses. They include the Tennis Channel, intellectual property used in broadcast technology, technical and software services companies, marketing technology firm Compulse and assets such as real estate, venture capital, private equity, and direct investments.
The restructuring is designed to “unlock unrecognized value” of the non-broadcast businesses and offer greater flexibility for growth of current and potential future ventures, the company said.
“We believe these other assets, some of which are currently buried in the broadcast division, can receive greater visibility outside the ‘broadcast’ umbrella, while Sinclair Broadcast will become a broadcast-focused subsidiary for which stockholders can better value its true performance,” said Christopher S. Ripley, Sinclair’s president and CEO.
Shares of Sinclair were down 4.6% to $16.37 each in mid-morning trading.
The reorganization, completed through a share exchange, requires approval of two-thirds of votes cast at a special stockholders meeting expected to be held in the second quarter.
Under the proposed structure, Sinclair would be the parent of Sinclair Broadcast Group and a new subsidiary called Sinclair Ventures.
Sinclair Broadcast would oversee Sinclair Television Group and Diamond Sports. Sinclair Ventures would oversee the rest of the businesses, including the Tennis Channel.
Diamond Sports had said last month it expects its 19 Bally Sports regional sports networks to continue broadcasting live sports in states such as Arizona, California, Florida, Michigan and Ohio while it works through bankruptcy to restructure and strengthen its balance sheet. Diamond is the nation’s largest owner of cable TV sports channels that showcase more than half of all MLB, NHL and NBA teams.
Ripley said Sinclair Broadcast’s new organization would simplify its corporate structure and improve transparency of financial disclosures.
Each outstanding share of Sinclair Broadcast’s Class A common stock and Class B common stock would be exchanged automatically on a one-for-one basis for a share of Class A common stock and Class B common stock, respectively, of the new Sinclair parent.
The new parent company’s Class A common stock would continue to trade on the Nasdaq stock market under the ticker symbol “SBGI.” Shareholders’ rights and benefits, including voting rights, would be the same.
The reorganization is not expected to lead to a change in company directors, executive officers, management or business.
