FCC Approves Sinclair-Allbritton Deal Minus Shell Games
Washington — On Thursday, the Federal Communications Commission approved Sinclair Broadcast Group's $985 million acquisition of several Allbritton TV stations, along with NewsChannel 8 in Washington. The final deal is far different from the one Sinclair initially proposed in July 2013. And today’s FCC approval came only after Sinclair was forced to alter the deal in response to opposition by Free Press.
Originally, Sinclair sought FCC approval to acquire stations in three markets where it already held broadcast licenses and buying additional stations would violate the FCC’s media ownership rules. Sinclair planned to divest the stations it already owned in those cities, but immediately enter into Shared Services Agreements (SSAs) and Joint Sales Agreements (JSAs) with the new owners. These owners were shell companies set up to allow Sinclair to retain control over those stations and circumvent the rules. One of those shell companies was Howard Stirk Holdings, which is owned by Armstrong Williams.
Free Press petitioned the FCC to deny the unlawful license transfers in Charleston, S.C., Birmingham, Ala., and Harrisburg, Pa. It also detailed, in the October 2013 report Cease to Resist, how Sinclair and other broadcasters had long abused SSAs to evade longstanding media ownership limits. The Commission's failure to enforce its media ownership rules in these cases increased media consolidation and worsened the already dismal state of ownership diversity.
As a result of our advocacy, the FCC rejected Sinclair's effort in the Allbritton deal to exert undue influence in more local media markets.
Free Press Policy Counsel Lauren Wilson made the following statement:
"We commend the FCC for reshaping the worst aspects of this deal, and for refusing to act on Sinclair's applications until it complied with the both the spirit and the letter of the law. Sinclair fought to extend its covert consolidation campaign, but the public interest won the day. The FCC has clearly signaled to Sinclair and others that it intends to enforce local ownership limits and protect local communities.
"Consolidation fans may claim that sharing arrangements allow broadcasters to create efficiencies to better serve communities and give minority broadcasters their best shot at ownership. But no one should believe these mischaracterizations. Despite the theatrics surrounding Sinclair's surrender of its licenses in two markets, local residents will not see any reduction in content. Sinclair can make the same programming available by using digital multicasting technology to air more than one network on its existing stations without playing shell games.
"The final deal also signals that the FCC won't tolerate the exploitation of its diversity goals. Armstrong Williams' Howard Stirk Holdings was never a real buyer, but a shell corporation through which Sinclair could expand its influence and funnel revenues. Allowing Armstrong Williams to be a licensee in name only while further concentrating local markets does diverse entrants no favors. Going forward, broadcasters should be on notice that sincere efforts to foster diverse ownership must include paths to independence and wealth creation. The public airwaves belong to all of us, and ownership of those airwaves should reflect the range of backgrounds and viewpoints this country has to offer."
