A Raycom television acquisition in Richmond forced it to divest a station, and in June, Sinclair agreed to buy one from Raycom. It planned to then sell its own existing station their and enter into an operating agreement with its buyer. But the Antitrust division of the DOJ has slammed on the brakes. Sinclair believes antitrust laws are not implicated in the arrangement, but say DOJ has a greater amount of discretion than usual due to a prior consent decree with Raycom tied to its own earlier acquisitions. The upshot is that Sinclair’s $85M acquisition of CBS WTVR-TV is now on ice, as is its related sale of Fox WRLH to Carma Broadcasting.
For those of you keeping score at home, here’s how it breaks down. Raycom, which owned WTVR and has an SSA with CW WUPV-TV, acquired NBC WWBT-TV from Lincoln Financial, decided to hang onto the NBC affiliate and cut the deal with Sinclair for WTVR. Sinclair, which already owned WRLH-TV, planned to sell it to Carma, and then enter into a smorgasboard of LMA-type arrangements to create a virtual monopoly, a tactic which has been allowed routinely by the FCC.
The denial of DOJ approval for the WTVR sale is expected to torpedo the WRLH-to-Carma transaction as well. Sinclair says it is exploring its rights under terms of the various sales agreements.
RBR/TVBR observation: In the ongoing proceedings on broadcast ownership, the FCC seemingly reaffirmed the 90s concept that you had to be able to legally own it to LMA it. In practice, the rules seem a little more wide open than that, and situations where one owner is handling the sales, programming, billing and administration tasks for another licensee exist all over the place. You’d like to see favorable interpretations of the rules by the government, but even more, you’d like to see fair and consistent application of the rules. You can argue into the middle of the next decade whether the TV duopoly rules are fair or not, but in this case there is no doubt whatsoever that consistent application is entirely absent.