Sinclair bid to be biggest could also make it most hated TV company in America
David Zurawik | The Baltimore Sun | October 20, 2017
In May, when the Sinclair Broadcast Group announced the purchase of Tribune Media, the $3.9 billion deal looked like a slam dunk to gain government approval and make the Hunt-Valley-based company the largest TV company in the nation.
It had a friendly president in the White House and a chairman of the Federal Communications Commission who just weeks before had pushed through a controversial rule change to make the purchase possible despite the conservative broadcast group’s size. But in the months since, a fierce media backlash, organized political opposition and what some see as “thumb in the eye” acts by Sinclair have approval by the FCC and the Department of Justice looking less automatic.
Those forces have also transformed a media company that has largely flown under the national radar for decades into one of the most widely known and harshly criticized by mainstream media news outlets and popular culture figures ranging from John Oliver to John Legend.
“A funny thing happened on the way to muscling this thing through: It turns out people don’t like the idea of one local television company having access to 72 percent of American households,” said Karl Frisch, executive director of Allied Progress, a Washington-based consumer watchdog organization opposing the Sinclair-Tribune deal. “You add that with the company’s overtly right-wing, partisan agenda-pushing nonsense that they force their local stations to run, and there’s a natural base of animosity there.”
The Communications Act of 1934, a law designed to control the rise of radio and the future of television by issuing and monitoring licenses to broadcast over public airwaves, gives the FCC the power to deny any deals not judged to be in the “public interest.” The Department of Justice has power to block deals that violate anti-trust legislation.
Already, it appears that Sinclair president and CEO Christopher Ripley’s hope that Sinclair would not have to sell stations to gain approval of the deal and prediction that it will close by the end of the year are looking less likely as opposition mounts on several fronts. Sinclair now says it is willing to sell stations in markets the Department of Justice identifies as problematic, and it has hired an investment bank to look for potential buyers. But the DOJ review might not even be finished by the end of the year, and it usually precedes the FCC’s.
“We have no reason to believe [the deal] won’t close around the year’s end,” Ripley said in a call in August discussing second quarter earnings. “The FCC has been very constructive in terms of its review.”
Jessica Rosenworcel is one FCC commissioner who has not been so “constructive” about the deal, and she came out blasting it in recent weeks.
“I’m not alone in my concerns about the concentration that will result from this proposed transaction,” she said of the Sinclair-Tribune deal in an Oct. 12 speech to the U.S. Conference of Catholic Bishops.
“I’m not alone in my fear that it will do harm to the time-tested principles of diversity, localism and competition,” she continued. “There is opposition across the political spectrum. In fact, I can’t put it better than the Newsmax Group, which has warned that ‘a free and diverse press, a bedrock principle of American democracy,’ will be irreparably harmed by this merger.”
Rosenworcel backed her claim of widespread opposition by citing Newsmax, a conservative media company that is at the forefront of the fight to keep Sinclair from gaining government approval for the deal that will extend its reach into 72 percent of American homes via 223 stations in 108 media markets.
She took a second whack at the deal Sunday on CNN’s “Reliable Sources,” saying, “It would be unprecedented for the agency to allow a broadcaster to get this large and reach more than 70 percent of the country.”
The group that best suggests the breadth of opposition to the deal is Coalition to Save Local Media, which includes the American Cable Association, DISH Network, Common Cause, Public Knowledge, One America News Network and Glenn Beck’s TheBlaze
One of the group’s tenets: “Americans rely on local news to deliver information relevant to their communities and daily lives. It is more important than ever that we keep our local news in our local public interest, not the interest of a few at the top of Sinclair Broadcasting.”
Allied Progress sounded a similar theme in an ad it released on digital media Thursday opposing the deal: “The Sinclair merger will undermine local news we’ve come to count on. That’s why consumer groups, progressive groups, conservatives all agree: The Sinclair merger is bad news. Call the FCC today and tell them to stop the Sinclair merger.”
In part, the ad was released on Thursday in hopes of influencing Tribune stockholders, who were meeting that day and ultimately voted overwhelmingly to approve the deal.
These are serious and sophisticated campaigns run by savvy politicos who understand the regulatory dance. Even if Sinclair wins approval for the deal, such campaigns have already helped focus attention on the deal and the potential danger of one giant company with a history of partisan politics having that kind of power.
Rebecca Hanson, Sinclair’s senior vice president for strategy and policy, responded to critics in an email response to questions from The Baltimore Sun: “Our F.C.C. filings are full of facts and data that refute our opponents’ claims,” she wrote. “With each filing they seem to become louder, but they still haven’t produced any facts or data that substantiate the harms they allege.”
Don’t expect Sinclair to publicly go toe-to-toe with those critics, either. “We don’t see the need to engage in any extraneous noise around the deal,” she wrote. “Our job is to give the F.C.C. and the D.O.J. the data they need, so they can do their job of reviewing this transaction in accordance with current law.”
Prior to joining Sinclair in 2013, Hanson worked at the FCC It seems safe to say she knows the regulatory dance, too.
But this proposed sale, which will add 42 stations to the Sinclair lineup, has evolved well beyond the normal media transaction and attendant government review.
The bid to become the nation’s dominant TV station group comes from a company with a record of partisan political behavior at a time of incredible political polarization in the country. And it comes at a time of great anxiety in some quarters as to how the most unorthodox president in American history will use the levers of power he controls to shape the country to his liking.
Into this cultural stew comes Ajit Pai, President Donald Trump’s appointee to head the FCC And on April 21, the commission re-instituted an outmoded rule called the UHF discount, which allows a station group to count only half the audience reach of each UHF station it owns against the congressional mandated limit of 39 percent of the country.
The idea, in the over-the-air broadcast era, was that signals of UHF stations were weaker. But it is a different story today with cable and satellite distribution of such signals.
On May 8, Sinclair announced the purchase of Tribune, which would have put it over the limit without the UHF discount on stations like WBFF in Baltimore.
The timing was bad enough in that it looked to some like Trump’s FCC commissioner had greased the skids for the right-wing broadcaster to circumvent a congressional rule intended to promote media diversity. But Sinclair was concurrently making programming moves that led to the same perception, like naming Boris Epshteyn, a former special assistant to Trump, its chief political analyst and mandating that all stations must carry three of his commentaries a week.
In July, I described some of his commentaries repeating Trump talking points as being “as close to classic propaganda as anything I have seen in broadcast television in the last 30 years.” I was not alone in such criticism. That same month, he was mercilessly pilloried on HBO’s “Last Week Tonight with John Oliver.”
Sinclair’s response to such criticism was to triple the number of “Bottom Line with Boris” segments from three to nine a week. That’s what Frisch called a “thumb in the eye.”
With such moves, Sinclair has now been drawn into the vortex or fear, anger, enmity and even hate surrounding the Trump presidency and the culture wars of today. Whether accurate or not, it has now been branded as “far-right” and linked to a president who repeatedly attacks mainstream media and threatens to limit First Amendment rights of the press.
Sinclair is not technically running Tribune properties such as WGN America (yet). But singer John Legend, executive producer of the series “Underground,” took to Twitter last month after the station — part of the pending Sinclair purchase — did not renew the critically praised saga of slavery.
“Sinclair has pursued a strategy of buying up local networks and moving their news coverage to fit their far-right agenda,” he wrote.
Even if Sinclair is successful in ultimately getting approval to take over Tribune Media to become the largest TV station group in the nation, it’s already in a dangerous place for any corporation to be in terms of image, let alone a media company that sells the credibility of its news to advertisers.
Government approval at the hands of a Trump-appointed agency head is one thing. Public opinion is another.