The chairman of Sinclair, a Trump-friendly local TV giant, is on a stock-buying binge

David D. Smith spent March and April frantically gobbling up stock of Sinclair Inc., the local broadcasting behemoth his father founded with a single Baltimore television station in 1971.

Smith, Sinclair’s septuagenarian chairman, spent more than $13 million during those two months to purchase over 900,000 class-A shares on the open market, raising his already significant stake in the company to a high of 6.6%.

Notably, he’s never bought this much Sinclair stock in that short of a time period, according to data that goes back to 2000.

From a trader’s perspective, a sudden uptick of buying from a well-established insider is always an interesting development. Smith served as Sinclair’s CEO from 1988 to 2017.

Decades of research has generated strong evidence that stock purchases by insiders — especially members of the board or company officers — often come before “abnormal” returns. That is, on balance, they can presage a juicy upward moves in prices.

That alone would be a remarkable development for Sinclair. The shares have been dogs for most of the last decade, a trajectory reflecting both the shrinking local television industry as well as a series of disastrous business decisions by Sinclair.

Sinclair didn’t respond to a request for comment.

In 2017, the company launched an ill-fated attempt to buy Tribune Co., one of the country’s largest owners of local stations at the time. The deal was closely scrutinized by the FCC and never went through, a failure that prompted shareholder lawsuits and, later on, an investigation from the agency over whether Sinclair had misled the government about a plan to divest some of its station holdings. Sinclair paid a then record fine to the FCC to settle the matter. Adding insult to injury, rival local TV owner Nexstar ended up buying Tribune, taking the crown as the largest local broadcaster.

Two years later, Sinclair decided to borrow big and spend roughly $10 billion to buy 21 regional television sports networks from Disney. The market loved the idea at first, with Sinclair shares soaring to a record high on the deal announcement.

Then came a series of snags, including the aforementioned FCC probe, which emerged in June 2019. Other headaches appeared in the form of fraught negotiations with Dish and Comcast over fees they paid to carry the network games, as well as the end of lucrative streaming deals with YouTube and Hulu. Finally, Covid hit, essentially shutting down professional sports for months. Ultimately, Sinclair’s sports subsidiary, known as Diamond Sports, restructured after filing for bankruptcy protection in 2023.

As all that was happening, Sinclair shares cratered, dropping by 80%. Despite periodic bounces, they’ve never durably recovered.

By 2023, it sounded like Sinclair was increasingly looking to diversify out of the local television business, with CEO Chris Ripley stressing a strategy shift toward venture investing and away from what he called an “over-regulated” broadcasting business.

So what gives? Why is Smith buying so much stock now? Well, one reason may be that the regulatory environment has changed a lot with the return of President Donald Trump, creating opportunities for the kind of dealmaking that can make stocks jump.

For years, broadcasters have complained that needed consolidation of the declining industry is hampered by government rules designed to keep individual media companies from growing too powerful.

For instance, the FCC’s national ownership cap prevents a single company from owning TV stations that reach more than 39% of the country’s households. And in local markets, an FCC rule prevents one company from owning more than one of the top four stations in the market.

Trump’s FCC chairman, Brendan Carr, has said he would like to eliminate ownership rules and caps that have imposed speed bumps on consolidation. Some changes are out of the commission’s control, having been established by an act of Congress.

But if such rules are rolled back, it could create the opportunity for Sinclair shares, as the company could either be a buyer of additional stations — something that was a key driver of the share price several years back — or even potentially a deal target itself. The company’s market cap is about $1 billion.

However, there are also other ways the administration could help local broadcasters like Sinclair and Nexstar.

A recently published online op-ed coauthored by FCC Commissioner Nathan Simington says, “It’s time to hit fake news where it hurts most: financially.”

It then proposes capping fees national networks can charge their local affiliates at 30%, a move that would squeeze the finances of national network news organizations while cutting costs for local broadcasters. Trump later retweeted the op-ed on Truth Social, and stocks of local broadcasters surged that day.

As a side note, it’s worth asking why the administration would be interested in aiding local broadcasters.

Part of the reason may be that these companies, unlike national network news units that have covered the administration skeptically, have emerged as influential amplifiers of the Trump administration’s political messages in recent years.

Sinclair has a long track record that includes requiring local affiliates to run right-leaning content, including segments from ex-Trump administration officials, and perhaps most infamously, mandating that local stations run centralized messages warning their viewers to be skeptical of the national news media, echoing a long-standing Trump talking point. (John Oliver did a great segment on in it back in 2017.)

Nexstar, for its part, is the owner of NewsNation. The upstart cable news network bills itself as a down-the-middle news organization, but has been influenced by former Fox News executives who’ve worked for the channel, including its managing editor of news and politics. Critics call it Fox News Lite.

Of course, there’s no guarantee a frenzy of local broadcast dealmaking is coming down the pike, or that any of the stocks benefit.

Still, companies with close financial, ideological, or business ties to the Trump administration have been some of the biggest winners since the election.

And at least one person — Smith — is wagering a fair chunk of change that good things are on the horizon for Sinclair.