FCC Okays Modified Sinclair-Allbritton Deal

The FCC late yesterday approved Sinclair Broadcast Group’s  $985 million purchase of eight ABC affiliates in seven markets from Allbritton Communications, saying it was satisfied with changes Sinclair had made to comply with the agency’s newly tightened local ownership rules.

The grant “exemplifies the careful scrutiny the [FCC] will provide to broadcast transactions that propose new combinations of sharing arrangements and financial entanglements between a dominant licensee and a so-called sidecar entity,” said FCC Media Bureau Chief Bill Lake in a statement.

Sinclair agreed to buy the Allbritton group a year ago, but the deal got bogged down at the FCC after the agency in March banned the use of shared services and joint sales agreement to operate second stations in small markets where the rules say broadcasters may only own one.

In its original deal, Sinclair proposed using SSAs and JSAs in three or the seven Allbritton markets where it already owned stations: Harrisburg, Pa.: Birmingham, Ala.; and Charleston, S.C.

Recognizing the new realities at the FCC, Sinclair said it would try to spin off the Allbritton stations in the three markets to unaffiliated third parties. It sold WHTM Harrisburg, Pa. to Media General for $83.4 million.

But unable to find buyers for the stations in Birmingham (WCFT and WJSU) and Charleston (WCIV), it said it would simply give up their licenses and move their programming, including that of ABC, to stations it owned in the markets — WABM in Birmingham and WMMP in Charleston.

To appease the FCC, Sinclair also agreed to terminate the local marketing agreement in Charleston between WMMP and Cunningham Broadcasting’s WTAT. “There would be no sharing arrangement or contingent financial interests between Sinclair and Cunningham,” Sinclair said.

The FCC was not fully convince that WTAT would operate independently of WMMP, however.

“Given the extensive and longstanding past relationship between WTAT-TV and WMMP(TV), we believe a reporting condition is also necessary to safeguard competition in Charleston,” the FCC said in its grant of the deal.

 “We require that, for a period of eight years, Cunningham report on quarterly basis to the Media Bureau any formal or informal sharing arrangements involving services provided to WTAT-TV by other stations in the market or by licensees, other entities, or individuals who hold an attributable interest in another station in the market. “

Public interest groups opposed to media consolidation praised the FCC for its strict enforcement of its local ownership limits.

“We commend the FCC for reshaping the worst aspects of this deal, and for refusing to act on Sinclair’s applications until it complied with the both the spirit and the letter of the law,” said Lauren Wilson of Free Press.

“Sinclair fought to extend its covert consolidation campaign, but the public interest won the day. The FCC has clearly signaled to Sinclair and others that it intends to enforce local ownership limits and protect local communities.”

Andy Schwartzman of the Georgetown Law Center sounded much the same note.

“Finally, the FCC has begun to address the schemes that Sinclair Broadcast Group and a few other group owners have used to evade the Commissions TV ownership rules, he said.

“We don’t need more consolidation, and I certainly don’t relish the prospect of Sinclair’s cost-cutters taking over a network affiliate in Washington, D.C. However, the FCC took steps to stop Sinclair’s blatant abuse of the ownership rules, and I hope this augers well for the future.”

Schwartzman’s reference to a station in Washington is WJLA, the flagship of the Allbritton group. The ABC affiliate will become the largest-market station in the Sinclair vast portfolio.

In the Allbritton deal, Sinclair is also picking up KATV  Little Rock-Pine Bluff, Ark.; KTUL Tulsa, Okla.; and WSET Roanoke-Lynchburg, Va.