Sinclair Broadcast Group is the largest operator of television stations in the United States. It owns approximately 193 stations in over 100 markets and reaches 40 percent of American households in reach. Currently, Sinclair is seeking to merge with Tribune Media for a reported $3.9 billion dollars. Typically, the Federal Communications Commission and Antitrust Division of the Justice Department must approve a broadcast merger.
Tribune Media is also one of America’s largest television broadcast companies. They own approximately 39 television stations and several cable stations as well.
The “Big Four” television networks do not own most television stations in America — they are owned by separate and distinct media companies. Networks own stations primarily in major cities.
A merger of Sinclair and Tribune would make Sinclair the largest single local TV broadcast owner in America by far — reaching 72 percent of all households in the U.S.
Those in favor of the merger state that the marketplace should be the guide of whether or not a merger should proceed provided that the merger does not stifle competition or harm the public interest. Those against the merger claim that Sinclair would have too much power and control over delivery of media to over two thirds of American households. They also complain that Sinclair is too conservative in its broadcasting of information favorable to Republican issues and causes.
The standards of scrutiny given to communications mergers by the FCC and the DOJ are different. The FCC must approve a merger under a broad “public interests” test while the DOJ must determine whether the merger poses a threat to competition and consumer welfare.
The FCC’s public interest standard includes whether a merger will diminish the public’s access to information from a diversity of voices and whether the merger operates within the rules of the FCC. The merger applicants have the burden of proof and the record of the proceedings is available to the public.
The DOJ standard of review puts the burden on the government to prove why the merger should be blocked as a matter of law. Antitrust laws are intended to prevent anticompetitive market concentration and mergers that are so large and expansive that it stifles competition in a like market. The DOJ review is without public hearing and is conducted behind closed doors.
The Sinclair-Tribune merger as proposed would have violated multiple FCC rules, many of which the FCC eliminated or weakened, required to approve the merger.
This past fall the FCC approved two changes to its regulations that allow Sinclair to move forward in its merger with Tribune.
The FCC voting along party lines approved:
- Weakening the local TV station ownership limit of two top-four stations per market; and
- Raising the national ownership limits and allowing a media company to cover more than 39 percent of the national audience cap by instituting new rules and “discounts” in formulating and determining the “national audience cap.”
Those against the merger allege that the rules were changed in order to facilitate the approval of the FCC of the Sinclair-Tribune merger, but Chairman of the FCC Ajit Pai stated, “I’ve spoken a lot about the importance of reviewing our rules to keep pace with changes in technology and the marketplace.”
As a Republican, I am generally in favor of mergers and acquisitions and believe that the marketplace should dictate absent overwhelming evidence of monopoly or stifling of competition. However, in my opinion, large media mergers require strict scrutiny by those charged with ruling on it. There is nothing more important to a free society than the free and accessible exchange of ideas, news, and opinion through all forms of media.
Politics should play no part in mergers. Having said that, the merger applications before the FCC and DOJ are chock full of political gamesmanship from the parties themselves, to the White House, to the Congress, and of course third parties.
The public should care about this particular merger because of the effects it will have on their reliance and access to local news, weather, sports, and public interest broadcast television programming across the board.
While I have no position on the Sinclair-Tribune merger it deserves as much sunlight as can be shone on it. Going bigger is not necessarily better.
Bradley Blakeman was a member of President George W. Bush's senior White House staff from 2001 to 2004. He is also a frequent contributor to Fox News and Fox Business Channel. He currently is a Principal with the 1600group.com a consulting company. — Click Here Now.
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