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Sinclair Broadcast fires back at critics of $3.9 billion deal to buy Tribune Media

Sinclair Broadcast Group fired back at critics of its plan to acquire Tribune Media Co. for $3.9 billion and become the nation’s largest broadcaster, saying the deal will create scale and efficiencies that will ensure the future of free, over-the-air television.

Hunt Valley-based Sinclair filed a petition with the Federal Communications Commission opposing numerous requests for the government to deny the acquisition. Groups such Dish Network LLC, the American Cable Association, Free Press, Public Knowledge and Common Cause have filed such requests with the FCC.

Chris Ripley, Sinclair’s president and CEO, said in a statement Wednesday the company “firmly believes in the mission of local broadcasting. … This acquisition will help to ensure the future of the free and local television model for both Tribune and Sinclair’s local communities.”

Sinclair, which has grown by gobbling up station ownership groups, says broadcasters face increasing competitive pressures from online streaming services that produce content, cable programming networks and services such as Dish Network.

“The natural synergies of bringing Sinclair and Tribune together will enable the combined company to invest in unique programming that addresses the news, information, and public safety needs of local communities — programming that will continue to be completely free for the tens of millions of households that do not or cannot subscribe to a paid multi-channel video service,” Sinclair said in its petition filed late Tuesday.

Sinclair, which grew out of WBFF Fox 45 in Baltimore, announced plans in May to buy Tribune, with would give it 233 television stations that reach 72 percent of U.S. households.

Tribune spun off its newspapers, including The Baltimore Sun, in 2014 into a company now known as tronc.

Sinclair’s deal for Tribune is made possible by a recent FCC decision to relax station ownership rules.

In April, the FCC relaxed those rules by reinstating the so-called UHF discount. It allows stations broadcasting on those higher-frequency airwaves to count only half their audience against a cap allowing a single company to own stations reaching no more than 39 percent of the nation’s television households.

The FCC’s rules change and Sinclair’s deal have been criticized by media watchdogs and others who say they are worried about the concentration of ownership. Analysts have said they expect the deal to trigger a wave of media consolidation as traditional broadcasters vie for viewers and advertisers in a digital age.

Most opponents have complained the deal would fail to serve the public interest and violate the broadcast ownership cap, even with the UHF discount in place. Critics also echoed long-running criticism that Sinclair uses its news broadcasts to advocate conservative views.

“The combination of the two companies would create a broadcasting behemoth with unprecedented control over both the national and local television markets — inflicting tremendous harm to competition and consumers,” the American Cable Association said in its petition to deny the deal. The cable group represents about 750 small and medium-sized cable operators, telephone companies, municipal utilities and other local providers of multi-channel video programming services.

Craig Aaron, president and CEO of Free Press, said the group, which promotes diverse and independent media ownership, is most concerned about the size and reach of the merged company.

“That any one company would control 230 stations reaching almost three-quarters [of the U.S.] is too much media power in too few hands,” Aaron said. “We’re particularly concerned the Trump FCC has gamed the rules to benefit Sinclair.”

The group sees that as even more problematic because “Sinclair doesn’t hide its political leanings and pushes conservative commentary on its affiliate stations,” Aaron said, referring to a practice of sending “must-run” right-leaning segments to affiliates, he said. “A broadcaster that’s going to bat for the administration is now coming to that administration for favors that are worth a lot of money.”

Those sentiments are repeated in many of hundreds of public comments filed with the FCC.

Opponents also said the proposed deal will stifle competition beyond the broadcast industry.

It would hurt wireless providers by giving Sinclair the power to block the transition of broadband spectrum from broadcasters to mobile broadband operators, making it difficult for smaller wireless companies to compete with dominant wireless carriers, the Competitive Carriers Association, which represents wireless providers, said in its petition.

Newsmax Media accused the FCC of using regulatory “sleight of hand,” “an approach that will end decades of bipartisan consensus on the importance of limiting television broadcast networks’ market reach and consequently, their influence and power.”

In its petition, Sinclair countered that it has a strong record of broadcasting in the public interest, running local stations that have racked up strong ratings and numerous awards, and that it would be able to direct more resources toward covering local news in Tribune markets.

Opponents’ allegations, the company said, are based on hearsay and raise issues of First Amendment viewpoint discrimination.

Sinclair said that while many of the complaints refer to what the company called selected short commentaries and internally syndicated programming, its opponents offer no evidence that Sinclair’s stations fail to cover local news or that the coverage is biased, based on corporate directive or not in the public interest.

“Each of the petitioners 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,” Sinclair said.

Critics have painted an inaccurate picture of Sinclair as a company that runs all its stations from a national command center, Sinclair said in its petition. Sinclair said it employs more than 3,850 station-level employees to produce local news across numerous markets, while it employs 14 corporate-level news employees and 11 who staff Sinclair’s on-air news operations in Washington.

The company said it has added staff and news programming to many of its acquired stations, helping to boost news ratings. The broadcaster said it has increased its local news and other content by more than 220 hours over the past three years.

Shares of Sinclair slid 2 percent Wednesday to close at $29.35 each. Its stock is off about 20 percent since it announced the Tribune deal.

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