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By Kyle Daly
Sinclair Broadcast Group Inc.'s pending $3.9 billion acquisition of Tribune Media Co. will help guarantee a future for free over-the-air television, the company said in response to petitions asking the Federal Communications Commission to block the deal.
Sinclair was responding to Dish Network Corp.; the American Cable Association, a trade group of small cable companies; public interest groups Free Press and Public Knowledge; and competing conservative news outlet Newsmax Media Inc., which all have urged the FCC to deny the merger. The FCC’s review is being closely watched as a barometer of how the agency under GOP chairman Ajit Pai will treat broadcast industry consolidation.
Sinclair said the deal will better enable the conservative broadcast giant to compete against online streaming services and maintain negotiating power against pay-TV giants, in an FCC filing late Aug. 22.
“This acquisition will help to ensure the future of the free and local television model for both Tribune and Sinclair’s local communities,” Sinclair President and CEO Christopher S. Ripley said in a separate statement.
Pai cleared a path for the merger to happen by leading an agency reversal earlier this year on how the FCC counts ultra-high frequency (UHF) television stations against a national ownership cap.
Sinclair and Tribune together reach roughly 72 percent of U.S. television households. Under the UHF formula that Pai restored, the combined companies would be just over the national cap, which limits broadcasters to reaching 39 percent of TV-viewing households. Sinclair doesn’t expect to have to divest “very many” stations to bring the combination under the cap, Ripley said at an analyst conference in May.
Opponents argue the combination would limit local voices and minority ownership in the industry. They also argue that Sinclair would have more clout to delay a nationwide reshuffling of broadcast signals following the FCC’s recent airwaves auction.
Sinclair said in its filing that every deal opponent is “either trying to use this proceeding to stifle competition for its own economic interests or is still living in a pre-cable, pre-internet, pre-smartphone world, untethered from the economic realities of the current media market.”
The merger wouldn’t threaten localism because Sinclair provides its stations with national news segments, giving them more time to focus on local coverage, the company said. Sinclair argued significant national scale is necessary to compete and negotiate with a pay-TV industry that’s seen more consolidation than the broadcast sector.
Sinclair said claims it might stall the TV signal rearrangement, or repack, are “absurd and unfounded.” Opponents said the company might do so to prioritize the industry’s transition to ATSC 3.0, a Sinclair-backed next-generation broadcast standard offering higher-quality audio and video, among other improvements. A faster repack would bring ATSC 3.0 equipment to market faster and speed the transition, Sinclair said.
Free Press policy director Matt Wood told Bloomberg BNA that Sinclair “wants to have it both ways” by arguing that vastly increased national scale will actually benefit localism.
“They’re focused on the minutiae because they don’t really have any good answers as to why this deal is in the public interest,” Wood said.
Deal opponents have until Aug. 29 to submit replies to Sinclair’s filing.
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Sinclair's filing is available at: http://src.bna.com/rUc
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