The proposed merger between Sinclair Broadcasting Group and Tribune Media should be denied because the combination would run afoul of major broadcast ownership rules and fail to serve the public interest even if compliance with these rules were not at issue.
That’s the key takeaway from a new filing submitted with the FCC by the American Cable Association (ACA), which is vigorously seeking to thwart a deal made possible only through the restoration of the Commission’s “UHF discount” by the Ajit Pai-led FCC.
In its comments, ACA President/CEO Matthew M. Polka said the Sinclair-Tribune transaction “would violate existing FCC rules.” But, even if the transaction were not per se unlawful, Polka added, “it would create a broadcasting behemoth with unprecedented control over both the national and local television markets.”
ACA set forth its views in Aug. 29 reply comments in connection with the FCC’s review of the $3.9 billion Sinclair-Tribune deal, announced in May following the restoration of the UHF Discount by the Republican-controlled FCC.
The proposed transaction would result in the ownership of more 200 full power stations nationwide, reaching 72% of the national audience — or 45.5% when applying the FCC’s UHF discount. The FCC’s national audience reach cap is presently set by statute at 39%.
The transaction would also mean the ownership of two, Top 4 affiliates in 10 local TV markets, in violation of the FCC’s Local Television Ownership Rule. Sinclair has already addressed this matter by expressing its intention to divest such stations.
Overlap markets where current FCC rules would not allow Sinclair to acquire the Tribune licenses include Seattle-Tacoma, where Sinclair owns KOMO-TV and KUNS-TV and Tribune owns KCPQ-TV and KZJO-TV.
This appears to be the market where a divestment is all but assured.
The same can be said of Oklahoma City, as Sinclair is the licensee of KOKH-TV and KOCB-TV, while Tribune is the licensee of KAUT-TV and KFOR-TV.
While Greensboro, N.C.; St. Louis; and Salt Lake City are listed, Sinclair owns one station while Tribune owns two stations in the respective markets. Changes in FCC ownership limits could make a threesome permissible, while a quartet is unlikely.
Meanwhile, a duopoly situation in Portland, Ore., is likely to pass muster as Sinclair owns KATU-TV, and Tribune owns Salem, Ore.-licensed KRCW-TV. The same can be said of Grand Rapids, Richmond, Harrisburg-York, and Des Moines.
Then, there are four markets where Tribune currently owns multiple stations, and current FCC rules would not allow Sinclair to acquire the Tribune licenses.
These markets include Washington, D.C., where Sinclair owns ABC affiliate WJLA-TV and Tribune owns ratings laggard WDCW-TV. WDCW’s low ratings are a linchpin to Sinclair’s ownership of The CW affiliate—WDCW is not a Top Four station in the market, and because there will remain at least eight independently owned and operated television stations in the market post-merger, Sinclair’s common ownership of WJLA and WDCW will comply with the local ownership rules.
A similar scenario can be seen in Milwaukee, where Sinclair owns WVTV-TV and Tribune owns WITI-TV. WVTV is not a Top Four station, and because there will remain at least eight independent voices in the market post-merger, Sinclair’s addition of WITI is good to go with the Commission.
In New Orleans, Sinclair owns no stations. But Tribune has a duopoly in WNOL-TV and WGNO-TV. The former is not a Top Four station.
Similarly, Denver is a market with no Sinclair stations while Tribune has ownership of KWGN-TV and KDVR-TV. KWGN is not a Top Four station.
In its initial comments, ACA said its opposition to the Sinclair-Tribune merger was based not only on the deal’s clash with existing FCC rules and Sinclair’s failure to meet the FCC’s obligation to demonstrate its deal serves the public interest, but also “its harmful impact on consumers and competition in a top-heavy TV station market characterized by rapid consolidation.”
ACA argues that retransmission consent payments would rise “because the completion of the Sinclair-Tribune merger would trigger after-acquired clauses in MVPD retrans agreements that generally mean paying higher Sinclair rates.” Additionally, ACA believes “the massive new entity would also use its leverage to force carriage of programming that MVPD consumers do not want, resulting in higher prices and fewer choices for consumers.”
As of today (8/30) the clock is now running on MB Docket 17-179, in which the FCC seeks comments in regard to the proposed Tribune Media-Sinclair combination.
Comments and Petitions to Deny were due by August 7; Oppositions were due by August 22; and Replies to Oppositions were due by August 29.