The following excerpt was sent out from The Baltimore Sun:
Media company Sinclair may be best known for its empire of television stations and local news programming across the United States, its founders’ conservative bent and its recent failed foray into regional sports network ownership.
Now, officials say the Hunt Valley-based company’s future will become more tied to industries outside broadcast.
Instead of buying more television stations, the company is shifting its investment strategy to acquire growing, nonbroadcast businesses, Sinclair President and CEO Chris Ripley said in a recent interview.
It plans to pursue acquisitions of companies that stand to benefit over the next decades from trends such as the aging of the population, the expanding decarbonization of the economy, the increase in pet ownership and spending, and the “do-it-for-me” sector.
“Our core business and our legacy might be in media and broadcasting, but at the end of the day we’re looking to make Sinclair a success in any industry that it’s in,” Ripley said. “If there are better investment opportunities in other industries, then we should pursue those rather than just blindly saying we’re a broadcaster, and this is all we’re going to do.”
The nation’s largest owner of TV stations still believes in the future of broadcast. The company is investing $65 million this year alone in its broadcast division, in areas such as next-generation television, a broadcast standard designed to improve video quality, reception on mobile devices and interactivity.
But, “as we looked at our business, it became increasingly clear that from a regulatory perspective, broadcasting is not in a good position,” facing far-less-regulated competitors such as Big Tech and Big Media, Ripley said.
“The investment was going to have to go somewhere else,” he said.
The shift is likely aimed at reinvigorating Sinclair stock, which has languished over the past few years. It’s lost two-thirds of its value since 2020 began, closing Friday down 43 cents at $9.71 a share.
Finding suitable companies with strong management teams will take time, but Sinclair aims to make two to four acquisitions through its private-equity fund over the next five years, Ripley said. They would become independently managed sister divisions to the broadcast division. The first acquisition could happen by sometime next year.
Under the theme of aging population, the company plans to take a close look at sectors such as nursing homes, retirement communities, and assisted living or aging-at-home services.
“We know demographically that the world and specifically the U.S. will become older over time and there are certain businesses that will benefit from that,” Ripley said.
For instance, “we know that demand for nursing homes is going to be going up because of the population’s aging,” he said. “Now we’re going in and we’re identifying specific industries … that would benefit from that megatrend.”
The company also will look at businesses such as pet insurers or dog day care services that benefit from the increase in both pet ownership and spending on pets.
It will consider businesses as well that benefit from decarbonization, “another trend that we’re very certain will be strong and enduring for decades to come,” in areas such as geothermal, alternate energy plans or recycling, Ripley said.
Sinclair says the claims are without merit.
Read more here.
