Fox in talks with Blackstone to buy Tribune Media

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Rupert Murdoch’s 21st Century Fox is in talks with Blackstone, the private equity firm, to launch a joint bid for Tribune Media, which owns a portfolio of US television stations, according to two people familiar with the negotiations.

Tribune has a market capitalisation of $3.2bn. Fox and Blackstone hope to trump a rival offer from Sinclair Broadcasting, the largest owner of US television stations, and plan to form a joint venture for the deal, with Blackstone providing the cash and Fox injecting its own portfolio of stations.

Fox has 28 owned and operated stations in the US but its broadcast network is carried by dozens of other stations — some of which are owned by Tribune. Its bid plans are partly defensive: if Sinclair succeeds in buying Tribune it will own these stations and be better placed to drive a harder bargain in carriage negotiations with Fox.

Combining its station portfolio with Tribune would give Fox more ways to exploit sports rights — particularly the US National Football League. 

Interest in owners of television stations has increased since the Federal Communications Commission recently reinstated what is known in regulatory circles as the “UHF discount”. 

Reinstating the discount means that station owners will not have to include channels broadcast over UHF waves in calculating how many markets they reach. With companies not allowed to broadcast to more than 40 per cent of the US, reinstating the discount effectively means a barrier to owning more stations has been lifted 

Reinstating the discount has also made consolidation of station owners much more likely and is the first of many moves to relax controls over media ownership that are expected under the new Federal Communications Commission.

21st Century Fox declined to comment and Blackstone could not immediately be reached.

David Smith, the chairman and largest shareholder in Sinclair, was among Donald Trump’s backers during last year’s presidential election. He is known to have supported the reinstatement of the UHF discount which other television executives say is essential for the survival of the local station market.

Steve Schwarzman, the chief executive of Blackstone, also has a connection to Mr Trump, having been chosen by the president to head his business advisory council.

Station owners have been battered by an uncertain advertising picture, with ad revenues hit by the growth of digital players such as Google and Facebook.

Fox’s interest in Tribune comes as it awaits regulatory clearance for its £11.7bn bid ($15.1bn) for the shares it does not already own in Sky, the European pay-TV group. 

Its Blackstone talks come as the company deals with the fallout from the recent departure of Bill O’Reilly, arguably the biggest star on Fox News Channel. Mr O’Reilly was forced out over claims that he sexually harassed several women. 

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