When Sinclair melds with Tribune, it will surpass the Fox station group in terms of market reach and becomes, I believe, the first stop of syndicators selling new shows. It will be able to deliver a program to at least two-thirds of the nation's TV homes all by itself. And Sinclair will have even more muscle in negotiating terms. In fact, it will be in a position to demand equity in the shows it agrees to carry.
Sinclair Poised To Become Major Syndie Force
In talking about the ramifications of Sinclair’s $3.9 billion acquisition of Tribune Media a few weeks ago, one thing I didn’t address was its impact on Sinclair’s place in the program syndication business. It will be considerable.
To recap, the deal is a blockbuster. It will swell Sinclair’s station count to 233 and extend its reach to 72% of TV homes and 108 TV markets, including 39 of the top 50 and seven of the top 10.
This is, of course, if the courts don’t stay the FCC’s April decision raising the cap on national station group coverage to 78%.
Sinclair has been an important program buyer since the 1990s when it began creating duopolies in many of its markets by exploiting loopholes in the rules and then the easing of the rules.
Before they quite knew what was happening, the studios discovered that they had to deal with some guys in Baltimore if they wanted to clear shows in the middle markets. And as I recall they weren’t really happy about it, although they would never say that publicly. The guys in Baltimore were rather stingy.
As Sinclair’s station portfolio grew so did its clout in Hollywood. But it was always a secondary player because it didn’t have the major markets. It didn’t have New York, Los Angeles and Chicago. It wasn’t a bona fide launch group.
That changes if Sinclair can cement the Tribune deal. It will not only have New York, Los Angeles and Chicago, but also four other top 10 markets — Philadelphia, Dallas, Washington and Houston. (Washington has been in the lineup since 2014 when Sinclair bought WJLA there along with the rest of the Allbritton group.)
Sinclair will arguably become the most important force in what I’ll call the tier-two syndication market.
There are two first-run syndication businesses in broadcasting. The first involves the big studios creating big budget shows for Big Three affiliates. Think Dr. Phil, Ellen DeGeneres, Judge Judy and Steve Harvey.
Nothing is happening in that business right now and nothing is expected to happen anytime soon. The affiliates are happy enough with the shows they have and neither the studios nor the broadcasters want to risk millions to see if they can come up something better.
Even with Tribune, Sinclair will have no more say-so in this market than other groups station groups like Tegna and Scripps.
The tier-two syndication business involves studios — big and small — creating shows for Fox, CW and MNT affiliates and independents of various stripes. Unlike the Big Three affiliates, they get no help from networks in filling the daytime and latenight hours.
Today, the business comprises conflict shows like Jerry Springer and Maury, a slew of court shows and various odds and ends. It’s a relatively active market with shows regularly coming and going.
This is the business the Sinclair will likely come to dominate post-merger.
Today, the two most important buyers in the tier-two market are Fox and Tribune because they have the major-market outlets and lots of time to fill.
A syndicator with a new show pitches it first to Fox and Tribune. If one bites, it then goes to Sinclair to get the middle markets. And if Sinclair signs on, its work is pretty much done. It just needs to shuttle about to clear the small markets.
So, even today Sinclair is in a power position and can squeeze the syndicator hard on terms. But it really doesn’t have much say in what shows get produced. That call is made by the syndicator in collaboration with the make-or-break launch groups, Fox and Tribune.
But when Sinclair melds with Tribune, it surpasses Fox and becomes, I believe, the first stop on the tier-two circuit because of its longer reach. It can deliver a show to at least two-thirds of the nation’s TV homes all by itself. The syndicator can still opt for the Fox-and-whomever route to 100% clearance, but it will be a long, hard slog through the provinces.
Sinclair will have even more muscle in negotiating terms. In fact, it will be in a position to demand equity in the shows it agrees to carry. Why not? It’s what the broadcast networks do when they are assembling their primetime schedules.
What’s more, Sinclair will have a much louder voice on what shows get made and offered in the tier-two market. No sense moving ahead with a show if your most important customer — Sinclair programming chief Arthur Hasson — thinks it’s a dud.
When Sinclair gave Hasson his corporate stripes in 2014, it was with the intention that he would develop original programming for the group. With Tribune, Sinclair can follow through on that ambition.
Last month, Fox announced that it will be testing seven tier-two shows this summer. Some are homegrown; some are from outside producers.
Next summer, I expect to see more summer tests and I’m betting there will be as many on the Sinclair stations as there will be on Fox’s.