UPDATE, 7:50 AM: Gannett has a response for critics who asked the FCC to reject its acquisition plan with Belo. “This transaction is entirely consistent with all FCC rules, policies and precedent, and will bring substantial benefits to the public,” the company says.
PREVIOUS, WEDNESDAY PM: The $1.5B deal announced last month would not only make Gannett the nation’s No. 4 TV station owner. It would have “new virtual duopolies” in St. Louis, Phoenix, and Tucson — raising the danger of retransmission consent fights — according to a filing today by the pay TV companies joined by the American Cable Association. Gannett has “cited its expectation of increased retransmission content fees as a central rationale for the transaction.” The complaint adds that consumers would end up paying higher pay TV bills if Gannett had the leverage to obtain higher payments from distributors who carry their local stations. And there’s a greater risk of blackouts if pay TV companies resist. The filing notes that FCC rules limit a company from owning multiple stations in a market. But instead of buying them outright, Gannett plans to use what the filing calls “a series of shills or ‘third-party sidecars,’ which appear to have been established for the primary purpose of holding Belo’s broadcast licenses.” These arrangements “are increasingly common among broadcasters.” St. Louis and Phoenix pose “particular concerns,” the filing says: Gannett owns NBC affiliates in both cities; Belo has the CBS affiliate in St. Louis and a top-four rated independent in Phoenix. If pay TV providers refuse to pay higher fees for one of the stations, Gannett “presumably would pack a double punch by implicating both” of its must-have stations. In Tuscon, Belo has the local Fox and CW affiliates. While the filers would prefer to have the FCC reject the deal on public interest grounds, if that isn’t in the cards then they want regulators to bar Gannett from negotiating joint deals for the stations it would own in the markets.