4 states try to block conservative TV mega-merger
4 states try to block conservative TV mega-merger:- A nearly $4 billion deal to create a nationwide TV powerhouse is attracting a growing group of critics.
Hunt Valley, Md.-based Sinclair Broadcast Group, the largest U.S. broadcaster with 191 stations, is seeking regulatory approval for the $3.9 billion acquisition of Tribune Media Co. and its 42 stations.
But state attorneys general in four states — Illinois, Maryland, Massachusetts, and Rhode Island — have come out in opposition to the merger, saying that the bolstered Sinclair, with 230-plus TV stations, would have too much national power and could stifle points of view in local markets.
They’re also concerned that Sinclair, which some critics say forced local stations to provide favorable coverage to then-Republican candidate Donald Trump’s campaign at the expense of rival Hillary Clinton, has too cozy a relationship with the Administration.
“The proposed consolidation fails to further the public interest by allowing for increased consolidation that will decrease consumer choices and voices in the marketplace,” the state attorneys general wrote in their letter Thursday to Federal Communications Commission. That agency and the Justice Department are reviewing the merger, which was announced in May.
The deal would bring together Sinclair’s current roster of 191 stations, which reaches more than 38% of the U.S., with Tribune’s portfolio of WGN and stations in L.A., New York, Chicago and Philadelphia.
The state AGs’ concerns are echoed by consumer advocates and some in the TV industry, as well as a coalition of 49 Democrats in the U.S. House of Representatives. The group sent questions about the merger to Sinclair CEO Christopher Ripley last week.
Sinclair’s post-merger reach of 72% reach of U.S. homes “is well above the cap that Congress imposed in order to protect viewpoint diversity and localism,” they wrote. A federal mandate prohibits the reach of a single local broadcaster of beyond 39% of U.S. TV homes.
The company entered the television business in 1971, when Julian Sinclair Smith opened its first TV station in Baltimore. His son David Smith became CEO in 1988 and by 2014, Sinclair had 109 TV stations.
The company got some attention in April for hiring Boris Epshteyn, a special assistant to President Trump, as a chief political analyst. His “Bottom Line with Boris” commentary segments appear across Sinclair’s network of stations.
Sinclair has said the merger would allow the new company to better serve local viewers with expanded local coverage, better facilities and more programming, delivered in part by operational efficiencies.
While the broadcaster is discussing stations it could swap to achieve approval of the deal, Sinclair CEO Ripley said during a conference call with financial analysts Wednesday, “we don’t really think there’s really a defendable reason that we’d have to sell any of these stations when you really look at it from an economic perspective.”
In its letter, which the Congressional faction seeks answers to by the end of next week,
lawmakers also referenced what it called Sinclair’s “heavily slanted political” commentaries and “must-run” segments that are distributed to local stations and asked whether the broadcaster would commit to not increasing the amount of time devoted to them.
Sinclair has defended criticism that it had given excessive coverage to the Trump campaign, saying it had made many offers to Democratic candidate Clinton. Trump appeared Sunday on The Full Measure with Sharyl Attkisson, a Sunday morning news show that is shown on 79 of Sinclair’s stations. The interview was taped prior to the president’s departure on his current trip to Asia. “Sinclair is clearly the favored child in the Trump White House Press Corps,” said a statement from Allied Progress, a consumer group that opposes Sinclair’s acquisition of Tribune.
And, lastly, the lawmakers asked for details on potentially “inappropriate coordination between” Sinclair and the FCC and the Trump Administration. This follows a letter from three other House Democrats including Rep. Frank Pallone in Aug. 14 asking for similar information about meetings and correspondence between Pai, the administration and Sinclair.
That same day a New York Times story entitled ‘How a Conservative TV Giant is Ridding itself of Regulation’ detailing meetings between Pai and Sinclair prior to his being named FCC chairman by President Trump.
Trump’s deregulatory edict is echoed by Pai, who has said the FCC’s rules have long-needed updating. But critics have voiced concern about how quickly regulations are being overturned — and whether the action has been done to assist Sinclair’s growth strategy.
Since Trump named him as FCC chairman, Pai has shepherded the reinstatement of the so-called UHF discount, which allows broadcasters to count UHF stations as having only half the reach of VHF channels. The action could help broadcasters buy additional stations and possibly remain under the current 39% reach rule. However, in the case of Sinclair, the merger puts them far beyond that rule should they not divest or swap any stations.
Also on the FCC’s docket: a vote at its Nov. 16 meeting to update several media ownership rules, which would make it easier for broadcasters to own two stations in one market and eliminate restrictions on cross-ownership of newspaper and TV stations in a marker.
The changes would result in “modernizing our media ownership rules to reflect the marketplace of the present, not the past,” Pai said in a recent blog post on FCC.gov.
Still, some critics wonder if it’s not too much too fast — and too advantageous to Sinclair. “The FCC has a mandate to regulate mergers to make sure they are in the public interest, which is designed to uphold the values of diversity, competition and local control. In our view this merger is at odds with all those values,” said Deepak Gupta, who formerly served as the senior counsel for enforcement strategy at the U.S. Consumer Financial Protection Bureau. He filed comments opposing the merger with the FCC for Allied Progress.
This new wave of opposition “may change the minds of some sitting on the fence,” but won’t likely derail its approval, said Rob Silvershein, a former TV executive with Plano, Tex. research firm The Diffusion Group. That’s because it’s become partisan. “Combine the political-framed nature of the opposition with the indifference of the American public on this matter, and this deal is likely to stand,” he said.
Pai may be correct that the changing media landscape requires new thinking when it comes to local media ownership, Silvershein said. But in the short-term, he said, “allowing Sinclair access to 72% of U.S. households by re-instating an antiquated rule is chilling in terms of both process and scale.”