Fox Looking at Pulling Sinclair's Affiliation, Get Out of Local TV

It appears that Fox television may hand off its O&O stations and also screw Sinclair in the process. 

Fox is looking to distance themselves from Sinclair and could pull their affiliation from a number of their stations. Fox is also looking at getting out of the day to day running of their O&O's, by teaming up with Ion Media. 

Bloomberg reports Fox Television is in talks to operate local television stations across the U.S. with Ion Media Networks Inc.

Closely held Ion would contribute its more than 60 independent stations to the joint venture, while Fox would throw in its 28 local stations, which include big markets such as New York and Los Angeles. As part of the deal, Fox would consider switching its affiliation to Ion from Sinclair for 26 stations that are up for renewal this year, said the person, who asked not to be identified.

Fox may also seek to switch 14 stations owned by Tribune Media Co., which is being acquired by Sinclair, upon the change of control, the person said. Sinclair didn’t immediately respond to a request for comment after normal business hours, while Chicago-based Tribune declined to comment.

By doing the deal as a joint venture, Fox could also retain some control over TV stations without having to include the slow-growing local-broadcast business in its financial statements.

Many TV stations around the country are owned independently of major broadcast networks like Fox, yet carry their programming under affiliation agreements. Ion, which emerged from bankruptcy in late 2009, doesn’t currently have affiliation deals, instead relying on syndicated reruns and some original shows to fill its programming grid.

Fox, controlled by billionaire Rupert Murdoch, has been concerned about Sinclair’s $3.9 billion acquisition of Tribune, which is awaiting regulatory approval. The combined company, with 233 stations, will have even greater negotiating leverage on how to split fees paid by cable providers. Sinclair has also been creating more of its own programming, including conservative commentary, that competes with Fox’s own shows.

Unlike Sinclair, Ion doesn’t have significant local news operations. That could be a challenge if Fox chooses to switch to Ion stations, since many viewers still tune in nightly expecting to get their news and weather reports.

Fox had considered teaming up with Blackstone Group LP to create a rival bid for Tribune, contributing Fox’s TV stations to a joint venture, but the idea was scrapped.

The negotiations between Fox and Ion are still in progress and a deal isn’t certain.

Some markets with a Sinclair Fox station and an Ion-owned station include Des Moines (KDSM vs. KFPX), Grand Rapids (WWMT vs. WZPX), Greenville, NC (WFXI vs. WEPX), Oklahoma City (KOKH vs. KOPX), Pittsburgh (WPGH vs. WINP), Scranton/Wilkes-Barre (WOLF vs. WQPX), Nashville (WZTV vs. WNPX) and San Antonio (KABB vs. KPXL), not to mention the markets like Cleveland where Tribune owns Fox affiliates.

Ion is the former Pax network founded by Lowell "Bud" Paxson. Hence why so many Ion affiliates have the letters "PX" in their call letters.