ACA, Free Press and Rainbow/Push Want Sinclair Transactions Denied
The FCC should deny several transfers of control associated with Sinclair’s $985 million buy of Allbritton TV stations, said the American Cable Association and some public interest groups in three petitions to deny filed Monday. Sinclair’s plans to address market overlaps by transferring stations to third-party companies with which it has shared service agreements are intended to let Sinclair “simultaneously control multiple broadcast outlets in the same markets in a manner that defies the public interest and is prohibited by the Commission’s rules,” said Free Press and Put People First. ACA objects to the deal because it will allow “collusion” in retransmission consent negotiations. The FCC should examine the company’s right to be a broadcast licensee in administrative law court because of previous violations of ownership rules by Sinclair, said Rainbow/PUSH Coalition. “If there is any question the viewing public can fairly expect the FCC to address, it is whether the nation’s largest television broadcaster is -- or is not -- basically qualified to be a licensee,” said RPC.
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Sinclair agreed to buy nine Allbritton TV stations and Allbritton’s Washington, D.C.-area 24-hour local news cable channel, NewsChannel 8 (CD July 30 p5). In Birmingham, Ala,; Charleston, S.C.; and Harrisburg, Pa., Sinclair would be buying stations in markets where it already owns a station, which would violate FCC multiple station ownership rules, Free Press said. To comply with the rules, Sinclair has filed applications to transfer control of four stations it owns in those markets to Deerfield Media and Howard Stirk Holdings (HSH)(CD Aug 15 p10), companies the public interest groups say Sinclair already has other sharing agreements with. “Sinclair has a storied past of teaming up with both Deerfield and HSH in order to skirt the Commission’s ownership rules,” said Free Press and Put People First.
The two public interest groups said the deals with Deerfield and HSH are lopsided in Sinclair’s favor, and give Sinclair too much control over the stations’ business dealings. Free Press criticized the sharing agreements in a news release Monday for “exploiting FCC loopholes.” The “trend toward broadcast consolidation is only getting worse. It’s time for the Commission to block these transactions and reestablish meaningful ownership limits,” said Free Press. It said Sinclair’s transfers of control should be decided by the full commission rather than at the bureau level, because they “raise novel questions of law, fact, and policy.” The public interest groups have raised the same objections to SSAs in the Gannett/Belo (CD July 25 p24) and Tribune/Local (CD Aug 21 p22) transactions, and the companies involved in those transactions have all argued the deals aren’t novel, and many similar deals have been approved by the Media Bureau. Sinclair didn’t comment for this story.
ACA’s objections focus on the SSAs in Harrisburg and Charleston, which it said would harm consumers by giving Sinclair the ability to negotiate retrans for both the CBS and ABC affiliates in Harrisburg and the Fox and ABC affiliates in Charleston. “In both of these markets, the transaction would harm consumers by increasing the cost of pay TV service, and increasing the threat of blackouts and the harm caused by actual blackouts,” said ACA. If the commission won’t deny Sinclair’s transactions outright, it should condition approval on a requirement that Sinclair not use sharing agreements to coordinate retrans negotiations, said ACA. Sinclair’s “anti-competitive” intent is to gain “insurmountable bargaining leverage” and stage “strategically timed” blackouts to increase profits, said ACA CEO Matthew Polka in a news release (http://bit.ly/1gpg5ER).
The FCC should examine Sinclair’s use of sharing agreements in the Allbritton transaction with “heightened skepticism” because the broadcaster has abused previous sharing arrangements, said RPC. Cunningham Broadcasting -- involved in several unrelated SSAs with Sinclair at the start of the last decade -- “unlawfully ceded control” to Sinclair to create an illegal duopoly and continued to do so even after being fined by the FCC, RPC said. The commission should use Sinclair’s transaction with Allbritton to rule on a petition for reconsideration filed in the Cunningham matter by RPC in 2004, said the coalition. RPC said Sinclair ousted and replaced Cunningham’s leadership with “Carolyn Smith, the very elderly and broadcast-inexperienced mother of the four brothers who control Sinclair,” and ran the company in ways that hurt Cunningham and benefited Sinclair for “no apparent legitimate business reason.” The commission should send Sinclair’s applications to administrative law court and issue “a freeze on further Sinclair transactions” until the questions from the 2004 petition are resolved, said RPC.