EARNINGS CALL

David Smith: Congress Must Save TV’s Future

The Sinclair CEO says the uncertainty surrounding the regulatory environment is making it tough on broadcasters. Congress and the courts need to supply some answers to disputes over shared service agreements and the FCC’s ownership cap. Also on the top of his to-do list is creating a next-generation broadcast TV standard that will let stations “be everywhere 24 hours a day, 365 on every device."

David Smith, CEO-president of Sinclair Broadcast Group, sees congressional and/or court action required to rebalance the regulatory environment so that broadcasters can effectively compete with broadband, telephone and cable companies.

In the meantime, Smith said during the company’s quarterly conference call, uncertainty surrounding the regulatory environment is making it tough on broadcasters.

Noting that the NAB recently sent a cease-and-desist order to the FCC over its plan to scrutinize shared service agreements on a case-by-case basis, Smith wondered what’s next.

“What, if anything, is the NAB going to do in the legal context?” he asked. “You’ve got Commissioner Pai standing up making some pretty bold statements — [in effect] will someone please sue the FCC because they’re violating the law. It may be reasonable to assume it will end up in some venue with a judge making the determination. If it’s found to be illegal, then what do we do?

“There’s a lot of instability that will sort out, maybe not in a time frame where we want to get some things done, but in a way that will benefit other broadcasters.”

Sinclair is following the FCC’s new marching orders on JSAs, selling three stations so that it can close on its $985 million acquisition of Allbritton. It is also restructuring sharing agreements with two other stations to ensure approval. Sinclair hopes to close on the Allbritton purchase sometime in the third quarter.

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At the same time, it’s buying WGXA, the Fox affiliate in Macon, Ga., for $33 million, pushing it right up against the 39% ownership cap.

That’s another FCC regulation Smith would like to see fade into history. “We think it is completely lopsided,” he said. “I think we have to look to Congress to do what it needs to do to reset the marketplace and give broadcasters the opportunity to compete,” adding that he’s optimistic “about Congress doing what it needs to help us compete.”

Smith said he views adoption of a new broadcast standard — ATSC 3.0 — as an essential tool to maintain competitiveness. “As a television company, we have not agreed that 3.0 is the precise standard, but we philosophically agree” that there needs to be a new standard.

“We need to be everywhere 24 hours a day, 365 on every device,” Smith declared, acknowledging details remain to be worked out. “Anything less than that is not good for the industry.”

In an effort to devise robust standards, Sinclair recently joined with Coherent Logix in a venture called ONE Media to develop an alternative to ATSC 3.0.

On one FCC pet project — the voluntary spectrum incentive auction set for next year — Smith said he’s indifferent. “We have nothing for sale,” he said. “In the markets where we are, there are no constraints …. Get on with it, get it done so we can get the repacking done.”

 


Comments (8)

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Christina Perez says:

May 7, 2014 at 3:46 pm

Mr. Smith, there are viable technologies that could make the current ATSC DTV standard more robust, able to be received by mobile devices, AND backwardly compatible with existing receivers. THAT should be your priority!

    Blair Faulstich says:

    May 7, 2014 at 4:03 pm

    In all fairness I believe Sinclair is leading the charge for ATSC 3.0, or an even more robust standard.

    Wagner Pereira says:

    May 7, 2014 at 5:54 pm

    Mr Smith lead the charge for a more robust standard instead of the original ATSC. You’re comment is comical in that shows lack of knowledge of the Industry.

    Christina Perez says:

    May 8, 2014 at 12:31 am

    Do you feel better now? Yes, I should have deleted the word “current” so as not to incur the wrath of (military contractor?) cyber-bullies like you!

    Wagner Pereira says:

    May 8, 2014 at 12:38 am

    Yes, the Military Industrial complex is targeting you! You caught us! Back to your Alex Jones podcasts!

Brian Bussey says:

May 8, 2014 at 10:36 am

the biggest challenge to broadcast television is from owners who have no interest in being broadcast station owners. they all want to be half asp web portal owners. there has never been a time in American history when viewers needed more long form, enterprise level investigative journalism. TV Station owners are slashing news staffs and laying off photogs and editors. those dollars are not being plowed back into their news programming. Those dollars are being used to entrench upper management, pay off stockholders and buy more stations. I am beginning to wonder if this industry is actually worth saving. Our drinking water is toxic. Half our adult population is un or under-employed and in Texas, the equivalent population of several small states are being persuaded not to purchase health insurance strictly for political leverage against the current POTUS. Texas TV stations should be hammering state politicians on these subjects and they are not touching them. I am waiting to see if Gannett’s recent purchase of a 80 reach of the Texas population will be better for Texas than the pitiful job that Belo did for decades.

    Wagner Pereira says:

    May 8, 2014 at 11:15 am

    You clearly have your view of what the public wants – and some of your points of issues facing the public are valid. However, you also make claims of internal operations that are not based on reality and TV cannot feed the viewers what they do not want and expect to survive.

    Brian Bussey says:

    May 8, 2014 at 1:48 pm

    it is rather arrogant of you to assume you have any clue as to what access I have to “internal operations” off TV stations. With regard to “feeding the viewers what they do not want” I have never asked for any update on Kim kardashian’s wardrobe malfunctions or where Johnny Football is going in the NFL draft. If Texas TV Newsrooms spent as much time talking about the Texas governor as they spent on the Texans next QB, tis would be a great state to live in….


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