continuing coverage Sinclair and Tribune Part 2: The Redux

[ABC 7 Denver 1554]

Chances went from "slim to none" to "slim got up and high-tailed it outta town with his hair on fire."

 

You're making me feel bad for a euphemism!

[ABC 7 Denver 1554]

There are 2 things that need to happen in DC immediately:

 

1. Call off this farce of a merger between Sinclair & Tribune

2. Impeach Trump

 

The second is unrelated though, if we're being PC.

[TSSZNews 1046]

Getting overlooked here: The deception / misconduct charge not only means the Trib deal’s on the line, but Sinclair could lose its station licenses over it.

I mean, that won’t happen, at it would cause untold industry tumult that would make Clear Channel look like peanuts...but fun to think about though!

[Rusty Muck 4167]

Getting overlooked here: The deception / misconduct charge not only means the Trib deal’s on the line, but Sinclair could lose its station licenses over it.

I mean, that won’t happen, at it would cause untold industry tumult that would make Clear Channel look like peanuts...but fun to think about though!

It took 20 years for RKO General to be broken up for pretty much the same charge (deception in selling advertising on KHJ-TV), but it eventually happened.

[Georgie56 3066]

Tribune has responded.

[T.L. Hughes 751]

All the shady practices that Sinclair has done for years have been brought to light because of this tranaction.

 

A lot more people notice when you try to use these practices to buy a tv station in Chicago, then they do when you try to buy a tv station in Columbus. I believed that a purchase this big in some of the nations largest tv markets would draw more scrutiny than Sinclair ever faced and that's exactly what happened. It's clear that Sinclair never prepared themselves for it because they feel entitled to whatever they want.

Ironically, that mentality is the FCC's fault. Sinclair felt emboldened to use these sidecar companies to skirt ownership after the agency (towards the end of Michael Powell's first year of chairmanship) chose only to slap Sinclair and Glencairn/Cunningham with a $40,000 fine for the Smith family exercising majority control of the latter in 2001 and greenlit their purchase of Sullivan Broadcasting using some of the LMAs with Glencairn/Cunningham (KOKH was one exception, since the market conditions in Oklahoma City allowed Sinclair to legally pair it with KOCB). Because of that, David Smith basically thought that since the FCC had no problems with the arrangement, even though they basically maintained illegal duopolies in several markets before and after the FCC began allowing legal duopolies in 1999, that it could engage in such arrangements over and over again and would never get punished for it.

 

The Politico article put it quite succinctly, Sinclair may have finally pushed its luck, all because they thought that a presidential administration in which corporate deregulation was a major priority could allow them to reach a means to an end... and they may have driven themselves into a brick wall.

[Rusty Muck 4167]

Ironically, that mentality is the FCC's fault. Sinclair felt emboldened to use these sidecar companies to skirt ownership after the agency (towards the end of Michael Powell's first year of chairmanship) chose only to slap Sinclair and Glencairn/Cunningham with a $40,000 fine for the Smith family exercising majority control of the latter in 2001 and greenlit their purchase of Sullivan Broadcasting using some of the LMAs with Glencairn/Cunningham (KOKH was one exception, since the market conditions in Oklahoma City allowed Sinclair to legally pair it with KOCB). Because of that, David Smith basically thought that since the FCC had no problems with the arrangement, even though they basically maintained illegal duopolies in several markets before and after the FCC began allowing legal duopolies in 1999, that it could engage in such arrangements over and over again and would never get punished for it.

 

The Politico article put it quite succinctly, Sinclair may have finally pushed its luck, all because they thought that a presidential administration in which corporate deregulation was a major priority could allow them to reach a means to an end... and they may have driven themselves into a brick wall.

Those business practices are also reflective on how Sinclair operates their stations.

 

First, hiring Boris Epshteyn and mandated his commentaries 3x a day, regardless of how laughably primitive the production values of his commentaries. (Again, they have the right to do this, but the way they have done so totally undercut their cause in the process.) When KOMO pushed those segments out of prime viewing, corporate forced them to carry them in pattern.

 

And then there’s the “dangerous to our democracy” stunt. And the revelations of staffers who wanted to leave in the wake of that fiasco, but couldn’t, because of the penalties Sinclair would exercise on them.

 

And THEN you look at how they operate stations like KDNL, WNWO, WPGH, WUTV and WTWC, never bothering to make any serious investments in any of those stations, if not the bare minimum.

 

In all those instances, Sinclair has clearly made it known they operate their stations out of simple entitlement. They felt that it was their right to hire Boris or not have any newscasts on KDNL, because they’re Sinclair and you’re not. And that reflects itself in Glencarin/Cunningham and the latest charades with the Tribune merger. No other company would in their right mind act the way Sinclair has whatsoever because that’s not how the world works.

 

In short, Sinclair pressed their luck and drew the Whammy.

[Rusty Muck 4167]

From Poynter: yes, it was the sidecar deals for WGN and WPIX that caused this stunning reversal.

[mre29 1340]

Getting overlooked here: The deception / misconduct charge not only means the Trib deal’s on the line, but Sinclair could lose its station licenses over it.

I mean, that won’t happen, at it would cause untold industry tumult that would make Clear Channel look like peanuts...but fun to think about though!

 

Should we start a Speculatron thread about this?

[dman748 1250]

Should we start a Speculatron thread about this?

If I'm not mistaken there is already a speculation thread about Sinclair and RKO General, I'd double check just to be sure about that

[Mrtraveler01 737]

From Poynter: yes, it was the sidecar deals for WGN and WPIX that caused this stunning reversal.

 

Sidecars that were created in markets that didn't even have conflicts with them.

 

Definitely an example of the hubris and sense of entitlement that Sinclair has had during this whole process.

 

How poetic.

[Rusty Muck 4167]

Sidecars that were created in markets that didn't even have conflicts with them.

 

Definitely an example of the hubris and sense of entitlement that Sinclair has had during this whole process.

 

How poetic.

WPIX is a VHF signal (RF 11/PSIP 11) so maybeeeee there's some slight reasoning for that, even if UHF Discount is to remain intact.

 

But WGN-TV is a UHF signal (RF 19/PSIP 9) so there was no excuse for that whatsoever.

 

In any event, they tried that stunt in markets #1 and #3, what did they expect would happen?

[tyrannical bastard 3464]

Between NYC and Chicago, that is 9.4 percent of the country (about 8 percent with the UHF discount applied) with about TEN MILLION tv homes.

 

That alone is more than some of the smaller broadcasters put together, combined.

[GoldenShine9 1509]

Between NYC and Chicago, that is 9.4 percent of the country (about 8 percent with the UHF discount applied) with about TEN MILLION tv homes.

 

That alone is more than some of the smaller broadcasters put together, combined.

 

That is more than half of what Gray's current reach is (pre-Raycom), for reference. It's also not far off what Meredith reaches as a company.

[Rusty Muck 4167]

Longtime radio industry writer Tom Taylor throws this out there... by helping to effectively kill off Sinclair-Tribune, Paid Off may have helped his cause with further dereg:

How so? One veteran tells this NOW Newsletter that FCC Chair Ajit Pai’s being politically shrewd – “Now when the Chairman proposes deregulating radio ownership in the Quadrennial Review, he can point to Sinclair-Tribune, and say ‘See, I know bad de-reg when I see it.” This NOW Newsletter’s been reporting since the April NAB Show that the Chairman communicated his desire to ease up on radio ownership rules. That sparked the NAB Radio Board to appoint a special committee that delivered its recommendation at the June Board meeting. That was for allowing ownership of up to eight FMs in the top 75 markets, and an unlimited number of AMs. In markets outside Nielsen’s top 75, there would be no limits at all. That’s just the Radio Board recommendation to the FCC, and the support is certainly not unanimous among radio leaders. (iHeart, which might like to preserve its own built-in advantages, opposes the Radio Board plan.)

[TheRob 920]

It looks like Sinclair will amend the deal again to appease the FCC by putting KIAH and KDAF in a trust to sell at a later date, and keeping WGN.

 

https://www.bloomberg.com/news/articles/2018-07-18/sinclair-to-amend-tv-station-sales-after-fcc-slams-tribune-deal?utm_source=twitter&utm_campaign=socialflow-organic&utm_content=business&utm_medium=social&cmpid=socialflow-twitter-business

[T.L. Hughes 751]

It looks like Sinclair will amend the deal again to appease the FCC by putting KIAH and KDAF in a trust to sell at a later date, and keeping WGN.

 

https://www.bloomberg.com/news/articles/2018-07-18/sinclair-to-amend-tv-station-sales-after-fcc-slams-tribune-deal?utm_source=twitter&utm_campaign=socialflow-organic&utm_content=business&utm_medium=social&cmpid=socialflow-twitter-business

Clearly, Sinclair's executives got really scared of Pai's statement, and went, "OK, OK! We'll change the deal and cut Cunningham and Steve Fader out! Pleeease don't send this deal to court who could make us into the next RKO General!"

 

The only remaining problems here, though, are threefold:

* Firstly, selling KDAF and KIAH would require seeking buyers immediately, considering that the outside date of the merger agreement is three weeks away (the only way they could expedite the process is to call up Tegna to begin negotiations to strike a deal that would give WFAA and KHOU duopoly partners).

* Secondly, this leaves Cunningham in the lurch, as they're left holding the bag owning KTXD, which Sinclair planned to operate alongside KDAF through that same shell company; KTXD would run into similar issues as KPLR, though it is more likely in that case, since KTXD is now a Stadium affiliate and no longer an general entertainment independent, for Cunningham to fork the license and assets over to a group that acquires stations with network affiliations usually relegated to subchannels.

* Thirdly, they haven't found a buyer for KPLR yet, and at least DOJ approval would hinge on them finding a group who is willing to acquire it, but there still haven't been any takers on account of its CW affiliation and that it would be left without any local programming because of the tie-ups of its news operation with KTVI.

 

Even with this amendment, Sinclair dragged this deal on too long, and there's no guarantee that it would appease the FCC enough to avoid the deal being sent to a court proceeding. Not to mention that a decision on the UHF discount that goes in the right direction (for Sinclair, the wrong direction), whether it takes place during the DC Circuit Court's rulings scheduled for the remainder of July or August, could be the final nail in the coffin.

[Eat News 4738]

Even with this amendment, Sinclair dragged this deal on to long, and there's no guarantee that it would appease the FCC enough to avoid the deal being sent to a court proceeding. Not to mention that a decision on the UHF discount that goes in the right direction (for Sinclair, the wrong direction) could be the final nail in the coffin.

 

(phone call)

"Hello Sinclair...

How much will you pay me to buy your STL station(s)... and save your ass for you?"

 

(click)

[Rusty Muck 4167]

That amendment reeks of a last-ditch effort to save a deal that’s beyond saving at this point. Dropping the WGN charade but not the Cunningham deal with WPIX... y’all may want to try again.

 

(phone call)

"Hello Sinclair...

How much will you pay me to buy your STL station(s)... and save your ass for you?"

 

(click)

Did someone secretly bug the phone lines at Fox Television Stations?

[T.L. Hughes 751]

That amendment reeks of a last-ditch effort to save a deal that’s beyond saving at this point.

 

 

Did someone secretly bug the phone lines at Fox Television Stations?

Speaking of, couldn't Sinclair have amended this deal by contributing WPHL to Fox and directly acquiring KDAF and/or KIAH?

 

WPHL is of little value to Sinclair compared to its other Pennsylvania stations, on account it is affiliated with a low-rated programming service that makes it difficult to operate as a standalone, has no (full-fledged) news department and (partly) relies on WPHL to produce its news. It's value to Sinclair on a political level is less than that of WOLF/WQMY/WSWB, really; at least two of the stations in that triopoly are major network affiliates.

 

How much cap space could Sinclair have cleared had they taken that option, whilst also amending the deal to directly acquire WGN?

[GoldenShine9 1509]

It looks like Sinclair will amend the deal again to appease the FCC by putting KIAH and KDAF in a trust to sell at a later date, and keeping WGN.

 

https://www.bloomberg.com/news/articles/2018-07-18/sinclair-to-amend-tv-station-sales-after-fcc-slams-tribune-deal?utm_source=twitter&utm_campaign=socialflow-organic&utm_content=business&utm_medium=social&cmpid=socialflow-twitter-business

 

That would put them over the cap though. They'd have to sell at least 2 more stations, likely many more.

[GoldenShine9 1509]

“We call upon the FCC to approve the modified Tribune acquisition in order to bring closure to this extraordinarily drawn-out process,” Ronn Torossian, a spokesman for Sinclair, said in the statement. “We have been completely transparent.”

It's only drawn out because they were stubborn and unwilling to compromise. The deal was supposed to have been done in the fourth quarter of 2017 based on their initial plan. It's now the third quarter of 2018 and we are nowhere near a final approval. They have been anything but transparent too...

[dman748 1250]

I'm sorry but this latest "last-ditch effort" that Sinclair tried today is too little, too late. I think the FCC will vote on sending the merger to the administrative judge and this deal will officially be dead

[broadcastfan9751 136]

Clearly, Sinclair's executives got really scared of Pai's statement, and went, "OK, OK! We'll change the deal and cut Cunningham and Steve Fader out! Pleeease don't send this deal to court who could make us into the next RKO General!"

 

The only remaining problems here, though, are threefold:

* Firstly, selling KDAF and KIAH would require seeking buyers immediately, considering that the outside date of the merger agreement is three weeks away (the only way they could expedite the process is to call up Tegna to begin negotiations to strike a deal that would give WFAA and KHOU duopoly partners).

* Secondly, this leaves Cunningham in the lurch, as they're left holding the bag owning KTXD, which Sinclair planned to operate alongside KDAF through that same shell company; KTXD would run into similar issues as KPLR, though it is more likely in that case, since KTXD is now a Stadium affiliate and no longer an general entertainment independent, for Cunningham to fork the license and assets over to a group that acquires stations with network affiliations usually relegated to subchannels.

* Thirdly, they haven't found a buyer for KPLR yet, and at least DOJ approval would hinge on them finding a group who is willing to acquire it, but there still haven't been any takers on account of its CW affiliation and that it would be left without any local programming because of the tie-ups of its news operation with KTVI.

 

Even with this amendment, Sinclair dragged this deal on too long, and there's no guarantee that it would appease the FCC enough to avoid the deal being sent to a court proceeding. Not to mention that a decision on the UHF discount that goes in the right direction (for Sinclair, the wrong direction), whether it takes place during the DC Circuit Court's rulings scheduled for the remainder of July or August, could be the final nail in the coffin.

 

They'll probably just extend the outside date again.

[TSSZNews 1046]

Speaking of, couldn't Sinclair have amended this deal by contributing WPHL to Fox and directly acquiring KDAF and/or KIAH?

 

WPHL is of little value to Sinclair compared to its other Pennsylvania stations, on account it is affiliated with a low-rated programming service that makes it difficult to operate as a standalone, has no (full-fledged) news department and (partly) relies on WPHL to produce its news. It's value to Sinclair on a political level is less than that of WOLF/WQMY/WSWB, really; at least two of the stations in that triopoly are major network affiliates.

 

Respectfully, I disagree. WPHL is one of the top performing "old guard" independent stations that isn't just running all news, Action News at 10 is competitive with FOX 29 to a point where I question why PHL is trying to do its own thing in the morning and doesn't instead make bank off a 7-9AM Action News, and it's a way for Sinclair to get market 4 ad rates, especially in political season, where there are regularly competitive races around.

 

Throwing PHL to FOX would be a WAY easier way to get under the cap. But the truth is, Sinclair owning a station in Philly looks good to investors because they can say they're in the top 4 markets as well as almost every market in Pennsylvania, now a swing state, and it looks good on the balance sheet come political season, too. KDAF and KIAH are easier to toss because unless it's a Blue Tsunami in the fall, the political money is a long way off from being in Texas.