DealBook: JPMorgan Case Tests U.S. Law on Buying Influence Abroad

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Sinclair Group Is Buying 7 Allbritton TV Stations

Sinclair has been aggressive in its expansion efforts. It has stations that cumulatively reach about 35 percent of households in the United States. In the last two years the company has completed about $2 billion in station deals, not including the one announced Monday.

“We are thrilled to add the Allbritton properties to our growing portfolio and national footprint,” David Smith, chief executive of Sinclair, said in a statement.

With the seven stations, Sinclair will take control of NewsChannel 8, Allbritton’s local cable news channel in Washington. Sinclair said that it would explore the introduction of a national cable news channel with NewsChannel 8 as its core.

The price was $985 million, nearly $100 million more than initial predictions by analysts when the stations were put on sale.

The head of the Allbritton Communications Company, Robert Allbritton, whose father, Joe, founded the company in the 1970s, did not comment on plans for the windfall, but he has said that he wants to concentrate on Politico, Allbritton’s Washington-centric news organization.

In effect, the two companies are following diverging paths. Mr. Allbritton is looking to the Internet for future profits, while Sinclair is sticking with local television.

In a memorandum in early May informing Politico employees that he was considering a sale of the stations, Mr. Allbritton wrote, “My future is Politico and companies like it.”

He added, “In fact, my plan is to invest even more in Politico and to place additional bets on media companies that meet my definition of successful journalistic and business enterprises.”

Politico has already announced one expansion. In June, it said it would add opinion from outside contributors and long-form storytelling in the form of a print magazine, to be published six times annually, under the longtime editor Susan Glasser.

Reached by telephone on Monday, John F. Harris, Politico’s editor in chief, said it was experiencing a “robust expansion,” but he was vague about plans. He affirmed that the site was moving more deeply into video production, but no more than it had been before the station sales were announced. “I don’t see those things as investments beyond anything any responsible media organization is doing,” he said.

This summer, Politico’s Web site has been experimenting with a subscription wall for frequent visitors in several states, a possible precursor to a plan to charge more broadly for its content.

Sinclair, too, is looking for more subscriber revenue. The fees paid, begrudgingly, by cable and satellite providers for local stations are one of the main factors behind the current cycle of consolidation; another is the prices paid for political advertising every two years. Along with Sinclair’s series of smaller deals, Gannett announced last month that it would acquire 20 stations owned by Belo for about $1.5 billion, and Tribune announced this month that it would acquire 19 stations owned by Local TV Holdings for $2.7 billion.

The nearly $1 billion price of the latest deal was driven primarily by the allure of WJLA in Washington, one of the biggest markets in the country. The other six stations, all affiliates of ABC, are much smaller, in markets including Birmingham, Ala.; Tulsa, Okla.; and Roanoke, Va.

Given the value of WJLA — and how much influence a station in the nation’s capital can have — some had speculated that Allbritton would sell it separately, but the company opted not to do so. A spokesman for Sinclair did not respond to an interview request, but in a statement on Monday, Mr. Smith made it clear that WJLA was the crown jewel.

“To buy a full-blown news operation in our nation’s capital and an infrastructure that allows us to be connected to our branches of government and be at the pulse of national issues is a once-in-a lifetime event,” he said.

Robin Flynn, a senior analyst for SNL Kagan, called the deal a win for Sinclair. “It not only gets an ABC affiliate in a top 10 market — Washington D.C., No. 8 — which can continue to generate significant political revenues,” she wrote, “but also the cable news channel in D.C. which it could leverage.”

Without making any definitive comments about the creation of a national cable news channel, Mr. Smith said NewsChannel 8 “provides the perfect platform should we decide to expand it into other markets, especially given the amount of local news we produce across our entire portfolio.”

Sinclair has connections to 149 television stations across the country, many of them in small and medium markets. It owns some of the stations outright; others it operates or manages for affiliated companies. With the addition of the Allbritton stations, Sinclair estimated that it would reach 38.2 percent of households in the United States.

Sinclair said it expected the transaction to close by the end of the year, pending Federal Communications Commission approval, which analysts said was all but certain. But at least one group objected to the deal, partly because it represents further consolidation in the industry and partly because Sinclair’s newscasts have been accused of showing bias toward Republican and conservative causes.

“The company’s cookie-cutter approach to local news and repeated use of the airwaves to push a partisan agenda are well known,” the group, Free Press, said.

Bits Blog: Google Expands Its Boundaries, Buying Waze for $1 Billion

A screen shot of the Android version of Waze, a social mapping service used by millions of drivers around the world.

6:55 p.m. | Updated

Google announced on Tuesday that it had closed its deal to buy Waze, a social mapping start-up that features real-time traffic data provided by users to help drivers find the fastest route to a destination.

Google did not disclose the purchase price in its blog post announcing the acquisition. But a person with knowledge of the transaction said it was $1.03 billion.

The acquisition highlights the increasing importance of location data in our on-the-go lives, whether it is in finding a place to eat or navigating an unfamiliar road.

Waze has drawn a particularly passionate base of nearly 50 million users around the world. In any given month, about one-third of them turn on the app to access the company’s directions. Waze passively tracks their movements via GPS to generate live information about roads and traffic. And users can add their own information about accidents, police speed traps and road hazards.

Google said Waze would remain separate from its own Maps service. Some of Waze’s real-time traffic data will feed into Google Maps, however, and Google plans to incorporate its powerful search capabilities into Waze.

“We’ll also work closely with the vibrant Waze community, who are the DNA of this app, to ensure they have what’s needed to grow and prosper,” Brian McClendon, the Google vice president responsible for its geographic products, said in the post.

Google and Waze declined to make any executives available for an interview.

But in his own blog post, Waze’s chief executive, Noam Bardin, said, “Nothing practical will change here at Waze. We will maintain our community, brand, service and organization — the community hierarchy, responsibilities and processes will remain the same.”

Mr. Bardin indicated that he and other Waze employees planned to remain with the company. Its product development team will remain in Israel, where Waze has most of its operations.

An earlier version of this post misspelled the surname of Waze’s chief executive. He is Noam Bardin, not Noah Bardin.

Ticketmaster Accuses 21 of Fraudulent Ticket Buying

In the lawsuit, filed on Tuesday at United States District Court in Los Angeles, Ticketmaster accused Joseph Shalom, a producer of live entertainment events in New York, of being the central figure in a coordinated series of attempts over the last two years to obtain large numbers of tickets and resell them at a profit.

According to the suit, Mr. Shalom and his associates used “bots,” or specialized computer programs, to bypass online features like Captchas — series of distorted letters or numbers — that test whether a potential ticket buyer is a person.

Ticketmaster, a division of Live Nation Entertainment, says Mr. Shalom and others linked to him used these systems to gain access to as many as 200,000 tickets a day ahead of the public, aiming for the most desirable tickets.The suit claimed Mr. Shalom and the others violated Ticketmaster’s terms of use, which prohibit bots and limit the number of tickets a customer may request in a single day. It also accuses them of committing several offenses as part of the ticket-buying process, including copyright infringement and the assumption of false identities.

Ticketmaster seeks unspecified damages in the suit and does not say how many tickets were bought by the 21 people. It also says the use of bots damages Ticketmaster’s reputation and harms the public.

As a result of the behavior outlined in the lawsuit, the company says, “the inventory of tickets available to consumers who do not use such devices is substantially diminished, which has led some consumers to question Ticketmaster’s ability to ensure a level playing field for the purchase of tickets.”

Bots have become a major source of consumer and industry complaints about the ticketing market. Consumers grow frustrated when concerts often sell out moments after tickets go on sale, and listings then appear for those tickets at inflated prices through online secondary markets like StubHub, owned by eBay, or TicketsNow, part of Live Nation.

The concert industry has also been frustrated at the difficulty of cracking down on the use of bots. Three years ago, federal authorities charged a group of men with using similar tactics to make $25 million in profit. But the men were sentenced to probation, which music executives say has not served as a deterrent. Concert promoters and others have said that the use of bots has become increasingly common, particularly for the most popular shows.

In a statement, Ticketmaster said: “We care about protecting fans and the integrity of our business. We are doing exactly what we have repeatedly said we do: stand up for the fans who use our site in the proper manner.”

Mr. Shalom did not respond to an e-mail requesting comment.

Media Decoder Blog: Disney Buying Lucasfilm for $4 Billion

Richard Lewis/European Pressphoto Agency George Lucas in 2005, flanked by stormtroopers from his “Star Wars” films.

8:22 p.m. | Updated LOS ANGELES — The Walt Disney Company, in a move that gives it a commanding position in the world of fantasy movies, said Tuesday it had agreed to acquire Lucasfilm from its founder, George Lucas, for $4.05 billion in stock and cash.

The sale provides a corporate home for a private company that grew from Mr. Lucas’s hugely successful “Star Wars” movie series, and became an enduring force in the creation of effects-driven science fiction entertainment for large and small screens. Mr. Lucas, who is 68 years old, had already announced he would step down from day-to-day operation of the company.

Combined with the purchase of Marvel Entertainment for $4 billion in 2009 and of Pixar Animation Studios for $7.4 billion in 2006, the acquisition solidifies Disney’s status as a leader in animation and superhero films. And it strengthens the legacy of Robert A. Iger, Disney’s chief executive, who has become known for his aggressive expansion of the company since taking charge in 2005.

Mr. Iger is set to step down as chief executive in March 2015, but will remain with Disney in a lesser role under an employment deal he reached with Disney last year.

Like the Marvel acquisition, the Lucasfilm purchase caught Hollywood and Wall Street by surprise. It was announced on Tuesday afternoon, while the New York Stock Exchange was closed because of Hurricane Sandy.

In a hastily convened conference call with investors late Tuesday, Mr. Iger said Disney planned to revive the Star Wars franchise and release a seventh feature film in the series in 2015, with new films coming every two or three years thereafter. Mr. Lucas will be a consultant on the film projects, Mr. Iger said.

Mr. Iger said Disney acquired a detailed treatment for the next three “Star Wars” films as part of the acquisition. He noted that the last film in the series, “Star Wars: Episode III — Revenge of the Sith,” was released in 2005, a period that he said has created “pent-up demand.”

Jay Rasulo, the company’s chief financial officer, said Disney’s financial calculations in agreeing to purchase Lucasfilm were driven almost entirely by the potential of the “Star Wars” series, which already has a place in the Disney theme parks. Lynne Hale, a spokeswoman for Mr. Lucas, said he was on a flight back to San Francisco from Los Angeles and could not immediately be reached. “It’s now time for me to pass ‘Star Wars’ on to a new generation of filmmakers,” Mr. Lucas said in a statement.

The companies said Disney would pay approximately half of the purchase price in cash, and would issue about 40 million shares of stock to cover the balance when the deal closes. Mr. Rasulo said Disney expects within two years to repurchase those shares. Lucasfilm, he said, should begin enhancing Disney’s earnings by 2015.

With the acquisition, Disney will acquire Lucasfilm’s live-action production business, along with its Industrial Light & Magic effects business, its Skywalker Sound audio operation and its consumer products unit, among other things. Ms. Hale noted that Mr. Lucas’s Skywalker Ranch and other physical properties in Marin County, Calif., were not part of the deal, and would remain with Mr. Lucas.

Kathleen Kennedy, a longtime associate of Steven Spielberg who recently agreed to become co-chairwoman of Lucasfilm, will now be its president, reporting to Alan F. Horn, the chairman of Disney’s movie studio.

Lucasfilm is based in San Francisco, and now, in combination with Pixar — which operates across the San Francisco Bay in Emeryville — it will give Disney, based in Burbank, a major presence in Northern California.

After the release of the first “Star Wars” film in 1977, Mr. Lucas’s Industrial Light & Magic took the lead in developing effects technologies that were used in a generation of science fiction and fantasy films. Eventually, other companies, including Weta Digital, a New Zealand company co-owned by the filmmaker Peter Jackson, rose to prominence in that field.

Asked about the future of Industrial Light & Magic, Mr. Iger said: “Our current thinking is we would let it remain as is.” In a later interview, Mr. Iger said Disney would be prudent in handling the Lucas operations, but was also mindful of the need to “reap the value” it sees there.

Along with “Star Wars” and its many iterations on movie screens, in television programming, in video games and elsewhere, Mr. Lucas has been a partner in the “Indiana Jones” series, and, occasionally, in an unrelated film, like “Willow,” though Disney executives said they were not relying on those films for future profit.

Mr. Rasulo told analysts that Lucasfilm’s consumer products licensing revenue, about $215 million this year, is roughly comparable to the amount of licensing revenue Marvel had when Disney bought it three years ago.

Currently, Mr. Rasulo added, Lucasfilm’s licensing revenue comes mostly from toys and heavily from North America. Disney, he said, is positioned to extend the licensing business to other products and to strengthen it internationally.

Asked by an analyst about Mr. Lucas’s reasons for selling at this point, Mr. Iger said, “I don’t want to put words in George’s mouth.” But he noted that Mr. Lucas has said he began planning his retirement four or five years ago.

Speaking later, Mr. Iger said talks were conducted personally between Mr. Lucas and himself, and began about a year and a half ago in Orlando, Fla., where the two spent time while reopening a “Star Wars” attraction at Disney World.

Of Mr. Lucas’s willingness to put his creative legacy in Disney’s hands, Mr. Iger said: “There was a lot of trust there.”