Sinclair Rebuts Opposition To Tribune Merger

Contrary to critics who want the FCC to block Sinclair Broadcast Group’s proposed $3.9 billion acquisition of Tribune Media, Sinclair says that scale — great size — is not the problem in broadcasting, but the solution to remaining competitive in a world of media giants.

“If broadcast companies, with their distinctly local focus and presence, are going to be able to continue to serve their communities, they will need to grow … to have the resources to invest in local news and sports (among other programming) and to advance and leverage technological innovation,” Sinclair said yesterday in an FCC filing.

“In short, the opponents to this deal have things backwards. Far from disserving the public interest, the combination of Tribune and Sinclair will advance that interest by strengthening local broadcasting’s ability to compete in the modern media landscape and by staving off the devastating pressures that have decimated the newspaper business.”

If allowed to merge, Sinclair-Tribune will have unprecedented scale with more than 200 stations covering 72% of U.S. TV homes.

Broadcasters live in a “challenging media landscape” populated by online services that produce their own programming;, “massive” cable and satellite operators; “consolidated” cable programmers; and other TV sources.

The merger with Tribune will allow it to compete in this environment, Sinclair says. “The natural synergies … will enable the combined company to invest in unique programming that addresses the news, information and public safety needs of local communities — programming that will continue to be completely free for the tens of millions of households that do not or cannot subscribe to a paid multichannel video service.”

The proposed merger has drawn fire from self-appointed “public interest” advocates who believe Sinclair is not committed to local broadcasting; cable and satellite operators who feel the scale will give Sinclair too much leverage in retransmission consent negotiations; and from T-Mobile, which believes Sinclair is trying to slow the repack of the TV band.

Sinclair answers each of the charges in turn.

While acknowledging that it has replaced anchors and reduced news staffing at some stations, Sinclair says it has been increasing its commitment to local news, adding 221.5 hours a week of news and other local programming over the past three years and spending $40 million to upgrade stations since buying the Fisher and Allbritton properties in 2013 and 2014, respectively.

Stations have also benefitted from Sinclair’s establishment of a Washington news bureau, Sinclair says.

It “contributes not only to the quantity and quality of information available to local viewers around the country, but adds to the diversity of viewpoints on national issues by providing a new voice in addition to those of ABC, NBC and CBS, which currently dominate the national broadcast news offerings in most local markets.”

The claim of some critics that Sinclair is trying to centralize the local news is “blatantly untrue,” Sinclair says. “In fact, Sinclair employs more than 3,850 station-level employees to independently produce local news across numerous markets and employs only 14 corporate-level news employees at its corporate office and 11 employees that staff Sinclair’s on-air news operations at its Washington, D.C. News Bureau.

“In other words, more than 99% of Sinclair’s news employees providing services to its local newscasts are in fact at its local stations, a percentage that is likely to increase because of the transaction.”

Sinclair says it has also significantly increased its coverage of local sports. “Between 2012 and 2016, Sinclair added approximately 6,148 hours of local sports programming, including high school and college football and basketball, an increase of 373%.”

Arguments that the deal with give Sinclair “excessive” power to extract retrans fees from MVPDs are unfounded, Sinclair says.

“To support such arguments, these parties present a distorted picture of the retransmission consent market, which ignores key contextual factors such as the fees paid to non-broadcast programmers, the historical undercompensation of broadcasters (which Congress sought to address by establishing the retransmission consent regime), and the effects of consolidation among the major MVPDs.

“Pay TV interests … have been rehashing the same arguments about broadcasters’ supposed market power for years, most recently in the commission’s review of the good-faith negotiation rules and of the Nexstar-Media General transaction. The commission correctly rejected these arguments then, and they are no more persuasive here.”

The allegations by T-Mobile that Sinclair is trying to delay the repack are “absurd and unfounded,” Sinclair says.

“To the contrary, perhaps more than any other broadcasters, Sinclair has urged the commission to adopt a repacking plan that will lead to the shortest actual repacking period, rather than pursue a shorter theoretical schedule that does not account for inevitable delays that are beyond the control of any stakeholder, including the FCC.

“The disruption of repacking will be costly for broadcasters and Sinclair has no interest in a process that takes any longer than necessary.

“Since the beginning of the auction, Sinclair has cooperated with the commission in the repack and there is no evidence to the contrary provided by any of the petitioners.”

Sinclair says it is committed to rolling out ATSC 3.0, the new broadcast standard, and the new services it enables. And getting through the repack is the key to ATSC. 3.0, it says. “Faster repacking will accelerate the realistic timeline for a coordinated ATSC 3.0 service launch. The earlier the repack is complete, the earlier ATSC 3.0 service can be launched in earnest.”

Sinclair wraps up its comments with charges of its own — that some of the critics are concerned not with the public interest, but with their self-interest.

This goes for the MVPDs as well as the independent cable programmers like conservative news operations Newsmax.

The programmers are “only trying to protect their competitive positions and are not raising any regulatory or legal issues,” Sinclair claims.

They “have provided no evidence that as a result of this transaction Sinclair will increase licensing fees or make it more difficult for independent programmers to get their programming carried on MVPDs — this is pure unfounded speculation.

“Newsmax makes an even more outrageous claim, that the deal will somehow ‘harm … democracy,’ without actually citing how the transaction would not be in the public interest, rather than just not in Newsmax’s own business interests.

“Those volatile unsupported claims are better suited for the pages of its website (which we note is available in every market in the country), and have no place in proceedings before the FCC such as this.”