Why Ruddy’s Wrong About Sinclair-Tribune

Last week, The Washington Post posted an op-ed by Chris Ruddy, CEO of Newsmax Media, in which made his case against the FCC approving the Sinclair-Tribune merger. He is certainly not alone in opposing the deal, but his op-ed affords a particularly ripe opportunity to challenge much of the fractured thinking, misunderstanding of FCC regulation, ignorance of the broadcasting business and utter nonsense that has been thrown in the way of the deal.

So, as a public service, I present here the op-ed with my running commentary in bold.

THE FCC’S RECENT ACTIONS MAY LEAD TO AN HOMOGENIZATION OF THE NEWS

By Christopher Ruddy

While President Trump has been condemning “fake news,” his very own FCC is pursuing policies that will lead to the greatest concentration of television media power in history.

Oh, really. Chris, I can see why you admire President Trump. You both live in an alternative universe with its own “facts.” If you want to talk about “concentration of television media power” in this universe, you might also want to consider Disney ($55.4 billion in 2016 revenue, Fox ($28.5 billion), CBS ($13.2 billion) and Comcast/NBC ($80.4 billion). Beside them, Sinclair-Tribune ($4.7 billion) pales. The only thing Sinclair-Tribune will be is the largest TV station group, which in the grand scheme of television isn’t that big a deal any more.

In April, under the leadership of a new chairman chosen by the president, Ajit Pai, the Federal Communications Commission reinstated an antiquated rule that not only paves the way for the $3.9 billion merger of television groups Sinclair and Tribune but will allow other television networks to own stations reaching more than 70 percent of U.S. households.

Other than Fox, no other broadcast TV network, has showed the slightest inclination to significantly increase its national footprint lately. And, despite the intermittent talk, I don’t think Fox will make a major play for more stations either.

One other thing, Chris. I doubt Sinclair will end up with 72% coverage after being ground down in the regulatory mill, but even if it does it will still have less coverage than major basic cable networks with which it has to compete, including CNN (78%), TBS (78%), USA (78%), TNT (77%), AMC (77%), TLC (76%), A&E (76%), Fox News Channel (75%), TV Land (74%) and MSNBC (72%).

Just weeks after that decision, Pai’s FCC proposed another rule change that is set to be put to a vote Tuesday: eliminating the requirement that TV stations maintain local studios in the markets where they are licensed. If this requirement is dropped, local news production could be moved to places such as New York and Washington as the big networks buy up local stations.

Chris, this is a red herring and you know it. Remote ownership does not lead to remote news production. If it did, virtually all local news would be produced remotely since virtually all news producing stations are owned by companies headquartered elsewhere — cities like Montgomery, Ala. (Raycom), Cincinnati (Scripps), Dallas (Nexstar) and Atlanta (Cox).  And, I would argue, some remote news production is a good thing. Washington bureaus like those of Nexstar and Gray strengthen local newscasts by adding a national dimension.

Pai’s decisions fly in the face of the FCC’s core mission to ensure that broadcasters using the public airwaves adhere to the principles of locality, diversity and competition. A bipartisan consensus has long supported these three principles.

I’m not buying any of this, Chris. The FCC talks about diversity in terms of “voices.” If the FCC approves Sinclair-Tribune, how many fewer broadcast voices would there actually be?

Give up?

One. That of Tribune. Just one voice will be silenced by this deal. Just as LIN was silenced when Media General bought it and Media General, in turn, was silenced when it was bought by Nexstar. So, in terms of diversity, the Sinclair-Tribune deal is no different than every other merger of station groups since the beginning of time.

As far as localism is concerned, there is no reason to believe that Sinclair would cut back on local news in any of the Tribune markets. It’s a proven source of revenue that distinguishes broadcasting from its cable rivals. 

Competition? It can easily be argued that a bulked-up Sinclair will create more competition on the national level. With its big footprint, it may be able to produce better programming and compete more effectively against all those big cable networks.

This consensus backed a law signed by President George W. Bush in 2004 that stated that no broadcast television network can own stations reaching more than 39 percent of U.S. households. But a merged Sinclair would reach 72 percent. So how did the FCC and Sinclair circumvent Congress?

On April 20, without any public hearings, the FCC redefined UHF stations as reaching only 50 percent of homes in a given market, a definition known as the “UHF discount” that was employed back when those fuzzy UHF signals were difficult to watch and considered inferior to other channels.

Chris, you can hardly say that the Pai FCC circumvented Congress when all it did was restore the national cap to the exact state it was when Congress passed it in 2003. It was FCC Chairman Tom Wheeler who modified the cap in 2016, apparently by magically divining what Congress truly intended 14 years ago.

To be fair, the Congress of 2003 probably wanted a 39% cap, but the target of the regulation was the Big Four broadcast networks, which, at that time, were expanding — not contracting — their station portfolios. I doubt it gave any thought at all to groups like Sinclair having to be contained.

However, after stations transitioned to digital broadcasting in 2010, nearly all commercial television stations moved to UHF channels, the preferred spectrum. Today almost all of these channels fully penetrate their markets.

Not true. The digital signals, especially VHF digital signals, are lousy and do not fully penetrate their markets. Perhaps what is needed is a VHF discount. “Nearly all” is an overstatement, and the transition ended in 2009.

Why Pai decided to use outdated market penetration rates that are not reality-based is not completely clear. But it is apparent that Sinclair immediately benefits, since the FCC effectively has doubled the national ownership cap from 39 percent to more than 75 percent.

Many Democrats have decried this FCC decision benefiting Sinclair, a conservative broadcaster with ties to Breitbart News.

Chris, what are you suggesting? That because it is a “conservative broadcaster,” it is not entitled to the same treatment at the FCC as every other broadcaster? And inquiring minds want to know — what is its relationship to Breitbart and why is that somehow disqualifying?

And while some conservatives are cheering the deal, the implications of FCC actions are troubling for most.

The nonsensical decision to reinstitute the UHF discount will also open the door for NBC, CBS, ABC and Fox to buy local TV stations reaching more than 70 percent of U.S. homes. See above.

Anyone who understands how these big media companies operate can see the danger. By owning local stations, the New York-based media networks could dictate local news coverage. With the planned elimination of the local studio rule, they will have a green light to do so.

Sorry, Chris, you’re starting to repeat yourself. That’s not a good sign for such a young man.

Let’s remember these “ownership caps” came into place in 1985 under President Ronald Reagan’s FCC, with a 25 percent limit. Reagan grasped that if major networks owned most local stations, Republicans wouldn’t get a fair shake.

If the Reagan FCC had had its way, it would have sunset the national ownership limits on radio and TV station ownership in 1990. NO CAPS AT ALL.

But it ran into strong political headwinds and was forced to compromise. Instead of eliminating the cap, it raised it from seven stations to 12 stations with no more than 25% of TV homes. The numerical cap was eliminated in 1996 by Congress and the coverage cap raised first to 35% and then to 39%.

Over time, the cap percentage was increased, but the concept has maintained broad support. Conservatives liked local news diversity. Liberals did not want a handful of conglomerates amassing too much power.

Strange bedfellows, Chris.

Democrats have already raised suspicions about the commission’s decision to implement the UHF discount just three weeks before the Sinclair-Tribune merger was announced. Could those companies have known somehow that such a change was going to occur to make their merger legal?

Yeah, they could. In the summer of 2016, while in the FCC minority, then-Commissioner Ajit Pai wrote a long and well-reasoned dissent to the Wheeler-led vote to get rid of the discount. From that day on, every FCC watcher knew Pai would reverse Wheeler if he ever got the chance.

Chris, if you didn’t want big mega-groups, you should have voted for Hillary. She would have installed a chairman like Wheeler who would have continued suppressing the growth of station groups according to the Democratic playbook. You went red in 2016 when you should have gone blue.

Pai has argued the ownership cap is not meaningful in a world of pervasive social-media outlets such as Facebook and YouTube. But he ignores the findings of a recent Pew Research Center study concluding that local TV news broadcasts are still the primary way Americans get their news. To date, there is no Internet company providing serious competition to local television news.

Hey, Chris, you got one right. However, I would argue that broadcasters are doomed if they cannot scale up to compete for advertising with the likes of Facebook and Google.

I believe a key reason Trump won the election, and the reason the GOP dominates the House and Senate, is the way that broadcast ownership caps have engendered diversity at the local level.

Really? More important than immigration, Islamic terrorism, the disaffection of the white working class, the culture wars and Trump’s extraordinary talent as a campaigner in person, on TV and in social media?

The FCC’s recent actions can only lead to a massive consolidation of stations and homogenization of news. The cure for “fake news” isn’t consolidation, it is more diverse and competitive news. Ultimately, a free press is predicated on a diverse press.

The press needs no defense or instruction from a Trump apologist whose channel is basically a platform for right-wing blowhards. I would say that the cure for fake news is great journalism.

Trump campaigned against this very “concentration of power.” Pai should recognize the harm his policies will do.

Trump campaigned for a lot of things, including less regulation. We are now spending our days sorting out which of his campaign pronouncements he meant and which he didn’t.

Before approving the Sinclair merger, the FCC has a duty to engage in a comprehensive and open media-ownership proceeding — one that seeks public comment and input from Congress. Anything less raises questions about impartiality and jeopardizes the integrity of the commission.

Chris, have you looked at the FCC docket lately? Never has a broadcasting deal not involving one of the networks drawn as much attention and comment as this one. At least I cannot remember one.

Eliminating ownership rules that have served us well for more than 30 years is a momentous change. The American people must play a role in that decision.

What? Is that it? Chris, you’ve ended your op-ed without stating your real reason for trying to derail the merger. You should admit it. You are opposing this deal because Sinclair is competing with you to be the next major conservative TV voice.

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