“The Eve Of Media Madness”: Sinclair-Tribune Deal Nears Key FCC Crossroads

As a group of 15 Democratic senators is calling for a federal investigation of the FCC’s review of Sinclair’s pending acquisition of Tribune Media, and former regulator Michael Copps is warning of Thursday’s pivotal FCC meeting, “We are on the eve of media madness.” Ties between the regulatory agency and President Donald Trump are at the center of the fight.

A letter signed by the senators expressed “strong concerns that the FCC’s ongoing review of the proposed merger of Sinclair Broadcasting and Tribune Media may be tainted by a series of actions and events that raise questions about the independence and impartiality” of the body.

The FCC’s open meeting Thursday morning in Washington, D.C., stands to have dramatic consequences for local broadcasting as well as the realm of digital advertising that seems darker since a fuller understanding of the 2016 election has coalesced. Most of the agenda items are proposed updates to decades-old media-ownership rules, which broadcasters say are out of date —  limits on “cross-ownership” of newspapers and radio and TV properties within the same market, for example. Already, Republican Chairman Ajit Pai, who recently was reconfirmed for a second five-year term, has restored the so-called “UHF discount,” which enables station owners to prorate their holdings based on whether their broadcast signal falls in the UHF range (as opposed to VHF, a stronger part of the dial).

The result of all of the changes could be a glide path for Sinclair Broadcast Group’s pending acquisition of Tribune Media, which is midway through its regulatory review. Sinclair has told investors it expects approval in early 2018. The $4 billion deal would make Sinclair — already the No. 1 local broadcaster — an even bigger behemoth, with stations covering 72% of U.S. households.

In addition to the already mammoth scale of such a company, the sharp-elbowed provocations of Sinclair have drawn more attention to its relationships and path to the top of local television. The company has a pronounced tilt to the right and employs conservative commentators including former Trump adviser Boris Epshtyn to deliver opinion segments that Sinclair’s 223 stations often are told are pieces of video that “must run.” Many of its executives, lobbyists and associates have ties to the Trump administration.

Copps called the FCC meeting “the nadir of the FCC’s credibility as a protector of the public interest.” He added, “We shouldn’t just be focused on one merger. There are going to be a lot more after that. It’s a flashing green light, greener than any before it.”

The ex-commissioner made the comments during a conference call for the press, on which he was joined by Karl Frisch, executive director of Allied Progress, and Craig Aaron, president and CEO of Free Press. Activist groups have vowed to bring lawsuits over the merger and on the call reiterated that option but said any legal offensive would depend on how the FCC meeting unfolds.

Prior to the Senate’s letter, two Democratic congressmen on Monday brought forward similar charges to the senators’, further suggesting an untoward degree of coordination between the Pai-led FCC and the Trump administration. Reports of meetings and communications between the White House and Republican FCC members, they wrote, “raised serious concerns about whether Chairman Pai’s actions comply with the FCC’s mandate to be independent.”

Many industry voices have been cheering for the deal. Gordon Smith, president of the National Association of Broadcasters, said in a statement that the trade group and “scores of broadcasters” support the rule changes. The shift, he said, has “industry-wide implications with a profound impact that is broader than any one company. For decades, the broadcast industry has asked the FCC to modernize its media ownership rules.”

Another aspect of the rules changes scheduled to be addressed Thursday is “next-generation TV,” which also goes by the geekier moniker ATSC 3.0. Promoted by broadcasters as a critical competitive asset as they battle tech and entertainment giants for consumers’ attention, the standards will introduce greater capacity for data and channel bandwidth, enhancing the viewing experience and also allowing for more sophisticated forms of communication. Of course, advertising is also part of what could change, raising alarms about privacy. Sinclair is one of the loudest champions of ATSC 3.0.

Aaron of Free Press said the swift and sweeping moves of the FCC “should be a national scandal” given Sinclair’s commitment to advancing a pro-Trump agenda. “Putting politics aside,” he said, “the FCC is fulfilling a longstanding media wish list. … They want to sell this as some sort of Hail Mary for local journalism.”

Copps said the FCC is “marching to the drumbeat of Wall Street expectations and public interest be damned.”

While local broadcasting and digital advertising will dominate the meeting, the larger message the FCC is sending about consolidation should not be overlooked, the activists agreed. With AT&T-Time Warner and potential deals involving Fox, Disney and a host of others likely, “everyone thinks they have to join the arms race,” Frisch said.