Politics & Government

TV ownership rules are changing and a Trump-friendly company stands to benefit

A series of moves by the federal government would help the nation’s largest owner of TV stations, Trump-friendly Sinclair Broadcast Group, grow even bigger.

The Federal Communications Commission has approved two changes to regulations, including ownership rules approved Thursday, that are raising concerns among critics of media consolidation. Sinclair wants to merge with Tribune and push its television holdings to more than 200 stations across the country, including three in Greensboro, two in Raleigh and three in the rest of North Carolina.

The moves have also drawn fire from congressional Democrats, who have taken notice of the conservative commentary aired on Sinclair stations. Sinclair requires affiliates that have news broadcasts to run nine segments a week featuring former Trump White House official Boris Epshteyn, according to media reports.

“Because Sinclair is so political, because they’re fully enlisted in the conservative media wars and send out conservative talking points to affiliates, it also raises some suspicions. Why pave the way for Sinclair in such an obvious manner?” said Rep. David Price, a North Carolina Democrat and sponsor of legislation aimed at stopping the merger.

Republicans hold three of the five seats on the FCC after President Donald Trump filled two vacancies. No party can control more than three spots on the commission.

FCC officials said the changes are intended not to help Sinclair, but to modernize rules to adapt to a much different media environment, one that includes news outlets on a variety of platforms.

The merger, if approved, will make Sinclair the largest holder of ABC, Fox, CW and MyTV affiliates. It would be the second-largest holder of CBS affiliates and the third-largest holder of NBC affiliates. And it would own the first- or second-ranked station in 26 of the top 75 markets, according to the company. Sinclair said the efficiencies and scale it can achieve with the merger “will advance the public interest by helping to shore up an industry buffeted by well-known economic challenges.”

“Sinclair firmly believes in the mission of local broadcasting,” said Chris Ripley, Sinclair’s president and CEO, in an August filing to the FCC. “This acquisition will help to ensure the future of the free and local television model for both Tribune’s and Sinclair’s local communities,”

Sinclair owns seven stations in North Carolina, including WLOS (ABC) in Asheville and WXLV (ABC) and WMYV (MyTV) in Greensboro. In Raleigh, Sinclair owns WLFL (CW) and WRDC (MyTV), which do not have their own news broadcasts. The merger would add Greensboro’s Fox affiliate to Sinclair’s portfolio, which also includes several stations in Tennessee, South Carolina and Virginia that reach North Carolina households.

That concentration of broadcast networks – and the type of must-have programming they provide – under one owner worries competitors, who fear Sinclair can bully cable providers into higher fees and other provisions, including carrying other channels the company owns like the Tennis Channel and allowing the company to add other channels at anytime.

“If they can’t get their demands, they threaten to cut off their feeds. They can have rates going up 35 percent, 40 percent each year. It’s draining the programming funds of cable providers,” said Chris Herring, president of the One America News Network and a leading voice for the Coalition to Save Local Media. “That hurts independent providers like me.”

The coalition is a broad collection of advocacy and media groups. It includes, among its 21 members from left, center and right, DISH, Latino Victory Project, The Blaze, United Church of Christ and the Sports Fans Coalition. The Blaze was founded by former Fox News host Glenn Beck.

The FCC will consider the merger in about two months.

“The real measurement of success is either stopping the merger or making sure very strong merger conditions are put in place,” Herring said of the coalition.

Sinclair owns 173 stations in 81 cities, pushing the company near the government’s national audience cap of 39 percent.

However, a rule change by the FCC in April — reversing a 2016 rule change by the organization — changes the way Sinclair counts its cap. Less than a month after that change reinstituted the so-called UHF discount, Sinclair announced a $3.9 billion merger with Tribune.

The UHF discount applies a 50-percent “discount” on households reached by UHF, a throwback to a time of weaker over-the-air transmission before the digital conversion. By applying the discount, Sinclair can absorb Tribune’s 42 stations, many in large markets, and still remain under the national cap even though it will reach 72 percent of households.

The change passed in April 2-1 with Republicans providing the yes votes.

“It’s particularly cynical to bring this back when it has no relevance at all technically. It’s just a device, a device for achieving their required result,” Price said.

FCC chairman Ajit Pai, who was elevated from the commission to chairman by President Donald Trump, voted against ending the UHF discount in 2016 because the FCC was not also “simultaneously reviewing the national audience cap.” Pai, a Republican who was originally added to the board by President Barack Obama, wants to raise the cap.

“I’ve spoken a lot about the importance of reviewing our rules to keep pace with changes in technology and the marketplace,” Pai said last year during the debate over the UHF discount.

On Thursday, by a 3-2 vote, the FCC approved a repeal of the ban on cross-ownership between newspapers and broadcasters and radio and television. The FCC says the rules are “no longer necessary to promote viewpoint diversity in the modern media marketplace.” The old rules prevented newspaper owners from owning a radio or television station in the same market, and forbade companies from owning more than two TV stations and one radio station in the same market.

The change could also help Sinclair in the merger by allowing it to hold onto all of its newly acquired properties without having to divest in certain markets. In 10 markets, under the previous rules, Sinclair would have had to sell a station.

“Whatever the limited benefits for viewpoint diversity of retaining the rule, in today’s competitive media environment, they are outweighed by the costs of preventing traditional news providers from pursuing cross-ownership investment opportunities to provide news and information in a manner that is likely to ensure a more informed electorate,” according to the FCC.

Commissioner Michael O’Rielly wrote in October that the Sinclair-Tribune merger was not the reason for the commission looking at changes to media ownership rules.

“Let me be clear: This transaction is in no way the catalyst for FCC actions on these issues,” O’Rielly wrote. “... I have been calling for media ownership reform since joining the Commission and as a staffer in the U.S. Senate before that. It’s not a new position or reaction to a pending application.”

Lawmakers are trying to eliminate the UHF discount, which would halt the merger. There are 14 Democratic co-sponsors on the Local and Independent TV Protection Act, introduced by Price and Rep. Jared Huffman of California.

Christopher Ruddy, a Trump confidant and chairman of conservative Newsmax, said allowing Sinclair to grow beyond the national cap “will be destructive to the Republican Party and conservatives” because eventually other liberal networks will grow similarly.

Others are concerned about the impact on local newsrooms, including potential cuts in some markets.

“Having that local feel and understanding the local market is very important,” Herring said. “You don’t want a national broadcaster with the same mentality dictated by corporate.”

Some are convinced political motivations are at play.

Leading Democrats on the Energy and Commerce Committee asked in an August letter if Pai’s actions “show a pattern of preferential treatment for Sinclair” and possible coordination between the FCC, the Trump administration and Sinclair. This week, Democrats asked the FCC Inspector General to investigate whether Pai has taken improper actions to benefit Sinclair.”

Pai said the changes are about updating rules to meet new demands. “In 2017, the FCC is poised to finally bring our media ownership rules into the digital age,” Pai wrote this month.

Trump son-in-law and White House adviser Jared Kushner told business executives that the Trump campaign struck a deal with Sinclair giving them more access to Trump officials if Sinclair ran its interviews with Trump without adding commentary, according to Politico. The Washington Post outlined a number of ways Sinclair helped the Trump campaign with its coverage choices, particularly in some swing states like Wisconsin and Ohio.

Sinclair denied any impropriety in its coverage of the 2016 election.

Brian Murphy: 202.383.6089; Twitter: @MurphinDC