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Use of a regulatory loophole will allow Sinclair to reach 72 percent of U.S. households after buying Tribune’s stations.
By MARGARET HARDING MCGILL and JOHN HENDEL 08/06/2017 07:03 AM EDT
Sinclair Broadcast Group is expanding its conservative-leaning television empire into nearly three-quarters of American households — but its aggressive takeover of the airwaves wouldn’t have been possible without help from President Donald Trump's chief at the Federal Communications Commission.
Sinclair, already the nation’s largest TV broadcaster, plans to buy 42 stations from Tribune Media in cities such as New York, Chicago and Los Angeles, on top of the more than 170 stations it already owns. It got a critical assist this spring from Republican FCC Chairman Ajit Pai, who revived a decades-old regulatory loophole that will keep Sinclair from vastly exceeding federal limits on media ownership.
The change will allow Sinclair — a company known for injecting "must run" conservative segments into its local programming — to reach 72 percent of U.S. households after buying Tribune’s stations. That’s nearly double the congressionally imposed nationwide audience cap of 39 percent.
The FCC and the company both say the agency wasn’t giving Sinclair any special favors by reviving the loophole, known as the “UHF discount,” which has long been considered technologically obsolete. But the Tribune deal would not have been viable if not for Pai’s intervention: Sinclair already reaches an estimated 38 percent of U.S. households without the discount, leaving it almost no room for growth.
The loophole is a throwback to the days when the ultra-high-frequency TV spectrum — the part higher than Channel 13 — was filled with low-budget stations with often-scratchy reception over analog rabbit ears. That quality gap no longer exists in today's world of digital television, but under the policy that Pai revived, the commission does not fully count those stations’ market size when tallying a broadcaster's national reach.
Sinclair’s expanding empire
Sinclair Broadcast Group owns stations in 81 markets, making it the nation’s largest TV broadcaster. The maps below show Sinclair’s footprint proportional to its total reach — which now covers an estimated 38 percent of U.S. households.
Its $3.9 billion deal will give it stations in 19 new markets, including New York, Los Angeles and Chicago — and the ability to reach 72 percent of households.
Critics including the FCC's most recent former chairman, Tom Wheeler, say the change amounts to a regulatory sleight-of-hand.
"Congress was explicit in black letter saying 39 percent viewership would be the maximum," said Wheeler, a Democrat who got rid of the discount last year. But instead, he said, “There was funny math created to allow the count to come up to still be below 39 percent, wink wink."
The FCC and Sinclair say a wide array of broadcasters — not just Sinclair — pushed for the return of the UHF discount, and they say Pai has been consistent in arguing that the agency shouldn't scrap the discount without first undertaking a broader review of media ownership limits.
Pai, whom Trump elevated to chairman early this year, told House Democrats at a July 25 hearing that the commission didn’t single out Sinclair for special treatment. “If you look at any of our regulatory actions, they’re not designed to benefit any company or segment of the industry," he said.
Still, the FCC action removed the most serious obstacle for Sinclair, which has been a target for Democrats and liberal groups disturbed by reports that the company favored Trump in its election coverage. While Sinclair doesn't spend much on traditional lobbying, it has donated generously over the years to congressional Republicans, who have shown little inclination to throw up any roadblocks to the deal.
The Washington Post in December reported that Sinclair "gave a disproportionate amount of neutral or favorable coverage to Trump during the campaign" while airing negative stories on Hillary Clinton. That followed POLITICO's reporting on a boast by Trump son-in-law Jared Kushner that the president's campaign had struck a deal with the broadcast group for better media coverage. (Sinclair disputed the characterization, saying it was an arrangement for extended sit-down interviews that was offered to both candidates.) In April, Sinclair hired former White House aide Boris Epshteyn, who had organized Trump's TV surrogates, as an on-air political analyst.
Controversy over Sinclair's politics predates Trump. The broadcaster came under fire in 2004 over reports it planned to air a documentary critical of then-Democratic presidential nominee John Kerry's Vietnam-era antiwar activism, though the company instead aired a news special on some stations rather than the full documentary. But the company's bid to get bigger via the Tribune deal has focused new attention on the company.
The broadcaster cultivated its ties with the FCC's Pai in the weeks after Trump's election, when the Republican commissioner was viewed as a top contender to lead the agency. Pai addressed Sinclair's Nov. 16 general manager summit in Baltimore, where he also met with the company's then-CEO, David Smith, according to a copy of Pai's calendar obtained through a Freedom of Information Act request. Pai held a second meeting with Smith and newly named Sinclair CEO Chris Ripley in Arlington, Virginia, on the day before Trump's inauguration, the records show.
A Sinclair spokeswoman said Pai was invited to speak at the general manager summit before the election, and noted that FCC Commissioner Mignon Clyburn, a Democrat, addressed a similar gathering in the past.
On Pai's first week on the job as chairman in late January, Sinclair urged the agency to reinstate the UHF discount, which allows ultra-high-frequency stations to count for only half their actual audience when calculating their national reach. Pai had dissented when the FCC’s then-Democratic majority abolished the discount in 2016, arguing that the commission should also review and adjust the national ownership cap.
http://www.politico.com/story/2017/08/06/trump-fcc-sinclair-broadcast-expansion-241337
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By MARGARET HARDING MCGILL and JOHN HENDEL 08/06/2017 07:03 AM EDT
Sinclair Broadcast Group is expanding its conservative-leaning television empire into nearly three-quarters of American households — but its aggressive takeover of the airwaves wouldn’t have been possible without help from President Donald Trump's chief at the Federal Communications Commission.
Sinclair, already the nation’s largest TV broadcaster, plans to buy 42 stations from Tribune Media in cities such as New York, Chicago and Los Angeles, on top of the more than 170 stations it already owns. It got a critical assist this spring from Republican FCC Chairman Ajit Pai, who revived a decades-old regulatory loophole that will keep Sinclair from vastly exceeding federal limits on media ownership.
The change will allow Sinclair — a company known for injecting "must run" conservative segments into its local programming — to reach 72 percent of U.S. households after buying Tribune’s stations. That’s nearly double the congressionally imposed nationwide audience cap of 39 percent.
The FCC and the company both say the agency wasn’t giving Sinclair any special favors by reviving the loophole, known as the “UHF discount,” which has long been considered technologically obsolete. But the Tribune deal would not have been viable if not for Pai’s intervention: Sinclair already reaches an estimated 38 percent of U.S. households without the discount, leaving it almost no room for growth.
The loophole is a throwback to the days when the ultra-high-frequency TV spectrum — the part higher than Channel 13 — was filled with low-budget stations with often-scratchy reception over analog rabbit ears. That quality gap no longer exists in today's world of digital television, but under the policy that Pai revived, the commission does not fully count those stations’ market size when tallying a broadcaster's national reach.
Sinclair’s expanding empire
Sinclair Broadcast Group owns stations in 81 markets, making it the nation’s largest TV broadcaster. The maps below show Sinclair’s footprint proportional to its total reach — which now covers an estimated 38 percent of U.S. households.
Its $3.9 billion deal will give it stations in 19 new markets, including New York, Los Angeles and Chicago — and the ability to reach 72 percent of households.
Critics including the FCC's most recent former chairman, Tom Wheeler, say the change amounts to a regulatory sleight-of-hand.
"Congress was explicit in black letter saying 39 percent viewership would be the maximum," said Wheeler, a Democrat who got rid of the discount last year. But instead, he said, “There was funny math created to allow the count to come up to still be below 39 percent, wink wink."
The FCC and Sinclair say a wide array of broadcasters — not just Sinclair — pushed for the return of the UHF discount, and they say Pai has been consistent in arguing that the agency shouldn't scrap the discount without first undertaking a broader review of media ownership limits.
Pai, whom Trump elevated to chairman early this year, told House Democrats at a July 25 hearing that the commission didn’t single out Sinclair for special treatment. “If you look at any of our regulatory actions, they’re not designed to benefit any company or segment of the industry," he said.
Still, the FCC action removed the most serious obstacle for Sinclair, which has been a target for Democrats and liberal groups disturbed by reports that the company favored Trump in its election coverage. While Sinclair doesn't spend much on traditional lobbying, it has donated generously over the years to congressional Republicans, who have shown little inclination to throw up any roadblocks to the deal.
The Washington Post in December reported that Sinclair "gave a disproportionate amount of neutral or favorable coverage to Trump during the campaign" while airing negative stories on Hillary Clinton. That followed POLITICO's reporting on a boast by Trump son-in-law Jared Kushner that the president's campaign had struck a deal with the broadcast group for better media coverage. (Sinclair disputed the characterization, saying it was an arrangement for extended sit-down interviews that was offered to both candidates.) In April, Sinclair hired former White House aide Boris Epshteyn, who had organized Trump's TV surrogates, as an on-air political analyst.
Controversy over Sinclair's politics predates Trump. The broadcaster came under fire in 2004 over reports it planned to air a documentary critical of then-Democratic presidential nominee John Kerry's Vietnam-era antiwar activism, though the company instead aired a news special on some stations rather than the full documentary. But the company's bid to get bigger via the Tribune deal has focused new attention on the company.
The broadcaster cultivated its ties with the FCC's Pai in the weeks after Trump's election, when the Republican commissioner was viewed as a top contender to lead the agency. Pai addressed Sinclair's Nov. 16 general manager summit in Baltimore, where he also met with the company's then-CEO, David Smith, according to a copy of Pai's calendar obtained through a Freedom of Information Act request. Pai held a second meeting with Smith and newly named Sinclair CEO Chris Ripley in Arlington, Virginia, on the day before Trump's inauguration, the records show.
A Sinclair spokeswoman said Pai was invited to speak at the general manager summit before the election, and noted that FCC Commissioner Mignon Clyburn, a Democrat, addressed a similar gathering in the past.
On Pai's first week on the job as chairman in late January, Sinclair urged the agency to reinstate the UHF discount, which allows ultra-high-frequency stations to count for only half their actual audience when calculating their national reach. Pai had dissented when the FCC’s then-Democratic majority abolished the discount in 2016, arguing that the commission should also review and adjust the national ownership cap.
http://www.politico.com/story/2017/08/06/trump-fcc-sinclair-broadcast-expansion-241337
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