JESSELL AT LARGE

Jessell | Defending Sinclair (Somebody’s Got To Do It)

Last week, Senators and Democratic presidential nomination rivals Elizabeth Warren, Bernie Sanders and Cory Booker called on the DOJ and FCC to investigate Sinclair’s purchase of 21 regional sports networks from Disney. Why single out Sinclair? Because they don’t like Sinclair’s right-wing, pro-Trump politics. And another thing, it's hard to see how the FCC can single out Sinclair for doing something (circumventing ownership limits) that many other broadcasters have done with impunity.

Harry Jessell

Among the many things I dislike about our president is his petulant and potentially destructive attitude toward the media. If a news organization is critical of him, his response is to throw Twitter tantrums and threaten retribution.

I have little doubt he would punish CNN, NBC, The New York Times and others he sees as his enemies if only he could figure out how. But figuring things out is not his forte.

If he can’t do something unilaterally by scrawling his signature on an executive order, he can’t do it. He still hasn’t discovered where they keep all the levers and strings you need to make Washington move in your direction.

(But, wait, wasn’t Trump behind the DOJ’s ill-begotten challenge of the AT&T-Time Warner merger because he wanted to stick it to CNN? I don’t know. You’ll have to show me some evidence to get me to believe.)

So, I don’t like it when Trump threatens news media because he doesn’t like what they are saying, but I don’t like it when those seeking to replace him do, either.

BRAND CONNECTIONS

Last week, Senators and Democratic presidential nomination rivals Elizabeth Warren (Mass.), Bernie Sanders (Vt.) and Cory Booker (N.J.) called on DOJ antitrust chief Makan Delrahim and FCC Chairman Ajit Pai to investigate Sinclair’s purchase of 21 regional sports networks from Disney.

In their four-page letter, they talk about how Sinclair’s absorption of the RSNs would dampen competition and increase the fees that consumers pay for cable and satellite TV.

But they also acknowledge their real concern: They don’t like Sinclair’s right-wing, pro-Trump politics. And they don’t like that Sinclair forces those views into the local newscasts of its stations.

They cite a 2018 commentary that, they say, ran on all the stations defending the use of tear gas against migrants on the border.

In the two-minute piece, they say, a former Trump official claims “American authorities ‘had to use tear gas’ on hundreds of migrants at a border crossing near San Diego … to guard against an ‘attempted invasion’ of the United States.”

Such commentary is apparently too much for the senators to bear.

“It is clear that Sinclair has an explicit interest in, and commitment to, relaying partisan political messages to its viewers — making its recent anticompetitive expansion attempts into millions of additional households all the more concerning,” they say.

Well, my message to Warren-Booker-Sanders is the same as it is to Trump: Broadcasters, like all other media owners in this country, are allowed to express their opinions whether powerful pols like it or not. That would include “fake news” and “partisan political messages.”

Not only are broadcasters allowedto do that, their right to do so is protected by the First Amendment.

So, instead of looking for backdoor ways of punishing media, the president and would-be presidents should be dedicated to shielding the media from the bureaucracy and solidifying free press rights in the courts.

I suspect that Warren, Booker and Sanders will survive long enough to make the next Democratic debate at the end of July on CNN.

So, here’s a question for them: Senators, the president has been hostile toward long-standing, highly respected news organizations, once even threatening the broadcast licenses of NBC. In calling for DOJ and FCC investigations of Sinclair because you don’t like its conservative views, aren’t you guilty of the same unconstitutional overreach?

FCC Chairman Pai Is Shocked, Shocked

Since I’m defending Sinclair this morning, I might as well go all in.

Last summer, the FCC rejected Sinclair’s application to acquire Tribune Broadcasting, alleging that it misled the commission about the spinoffs of three Tribune stations to comply with the national ownership limits — WGN Chicago, KDAF Dallas and KIAH Houston.

The allegations are serious. Until they are resolved, Sinclair’s licenses are impaired and it can’t buy any more stations.

Last week, the FCC finally got around to launching an investigation of the allegations, sending a letter to Sinclair filled with questions and requests for documents. Sinclair has until July 9 to respond.

Rather than sell the three stations to independent third parties, Sinclair proposed selling them to entities that would turn around and allow Sinclair to operate the stations through joint sales and shared services agreements. WGN would go to Baltimore businessman Steve Fader. The other two stations would go to Cunningham Broadcasting.

I have no doubt that these deals were bogus in the sense that Sinclair would have had ultimate control over every aspect of the stations’ operations — programming, sales, purchasing, hiring and firing, you name it.

But here’s the thing. Such deals to skirt the FCC ownership rules are not unusual in broadcasting. There are plenty of them in place today and, I might add, every one of the them has had the tacit approval of the FCC staff, if not the commissioners.

The arrangements are so common that the industry even has a name for them when they are used locally: sidecars.

Sinclair set up Cunningham years ago for the sole purpose of circumventing local ownership rules. When Sinclair reports its financials each quarter, Cunningham’s numbers are mixed right in.

Nexstar has a similar setup with Mission Broadcasting.

Right now, the FCC is considering Apollo Global’s acquisition of the Cox Media Group’s TV stations, which includes a sidecar duopoly in Jacksonville, Fla., that Cox uses to get around the prohibition against owning two network affiliates in the same market.

CMG owns Fox affiliate WFOX and operates it in tandem with CBS affiliate WJAX, which is technically owned by former CMG President Bill Hoffman. The FCC OK’d the arrangement when CMG bought the duopoly in 2012; I expect it will do so again when it approves the Apollo buy.

So why is the FCC picking on Sinclair?

Perhaps Sinclair actually lied about or covered up the aspects of the spinoff arrangements. Misrepresentation or “lack of candor” is a capital crime at the FCC. The maximum penalty is losing your right to hold a broadcast license, although that penalty is rarely imposed.

Or, it could be the arrogance of Sinclair Executive Chairman David Smith. Perhaps he was so confident he could get anything by the FCC that his lawyers got sloppy in setting up the WGN deal and he didn’t bother finding a plausible front for the LLC buying WGN. He just lined up one of his Baltimore business cronies, a guy with no broadcasting experience.

If I were FCC Chairman Ajit Pai, I would be insulted if a licensee brought such a deal to me for my blessing. As most broadcast attorneys know, if you intend to slip through the faux spin-off loophole, there is a certain protocol you must follow.

(Until I know more, I reserve comment on the speculation that Pai killed the Sinclair-Tribune merger as a favor to Rupert Murdoch and Christopher Ruddy who feared Sinclair would use its expanded footprint to compete with them in the conservative news business. Ruddy, owner of Newsmax, a Fox News Channel wannabe, and friend of Trump, was a vocal opponent of the merger. I presume that Murdoch, also tight with Trump, was a behind-the-scenes opponent.)

So, bottom line, I don’t see how the FCC can single out Sinclair for doing something that many other broadcasters have done with impunity, unless it did so in an unusually deceitful or haphazard manner.

Pai is in danger of becoming the FCC’s Captain Renault.

P.S. I figured that Sinclair would have settled this affair by now, forking over a big fat fine for the right to buy TV stations again. But last week’s letter suggests that the negotiations have not be going well. Imagine that:  Sinclair being hard to deal with.

Harry A. Jessell is editor of TVNewsCheck. He can be contacted at 973-701-1067 or here.

 

 

 

 


Comments (1)

Leave a Reply

JamesV says:

July 1, 2019 at 10:49 am

One big reason why the FCC may have gone after Sinclair regarding the Tribune deal, while letting others slide by with their various sidecar (and other) arrangements, is that it was presented with sufficient evidence. I have little doubt that Harry is right, that many are doing the same, or at least sufficiently similar things to run afoul of FCC rules, but the FCC does not independently investigate these situations without sufficient evidence, and that evidence has to come from outside sources or a deal so poorly constructed that it screams for further inquiry. Sinclair faced sufficient opposition to its acquisition of Tribune from parties who looked at the deal and did some digging beyond the written words in the transaction documents. They were able to present enough information the FCC could not ignore. Unfortunately, or fortunately (depending on one’s perspective), the FCC lacks the staff resources to actually investigate all these deals. It generally relies on parties adhering to the terms of the written transaction documents, and without sufficient evidence raising a question about the veracity of a deal, it will approve it. Many lambasted former Chairman Wheeler for his policy changes and approaches regarding such deals, but in at least some ways it was a recognition that the situation has gotten out of hand and the FCC’s practical limitations to police transactions once approved to see if the parties adhere to written deal terms. As long as there are ownership limits, some parties will try to find ways to get around them. Sinclair was arrogant and sloppy, and got caught. As Harry notes, it has been doing such things for years. Now we’ll see whether it pays the piper, and how much.

As for the Presidential candidates challenging Sinclair’s acquisition of the RSN’s, they should stick to antitrust and other laws in urging action. While Sinclair’s ideology and use of its stations may be their motivation in opposing the deal, the content of Sinclair’s speech cannot serve as the basis for an investigation or refusal to approve the transaction. It is unfortunate that these candidates went to this extreme and they should be held to account. Harry’s proposed question for them at the next debate is a good one, but I doubt it will get posed, unfortunately.


More News