Arguments Against Retrans Muscle Gain Momentum - Multichannel

Arguments Against Retrans Muscle Gain Momentum

Policymakers Look Hard At Shared-Service Deals
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WASHINGTON — Cable operators, led by the American Cable Association, continue to get some love from Washington in their efforts to block or condition station-group transactions with side deals involving shared sales, programming or management.

The Federal Communications Commission has told Sinclair Broadcast Group it must either amend a deal to buy Allbritton Communications TV stations, or drop a request to buy stations in three markets — Charleston, S.C., Birmingham, Ala., and Harrisburg, Pa. — that involve grandfathered local-marketing agreements that would violate its local-ownership rules now that those stations are changing hands.

The notice came in a letter to Sinclair from the agency’s Media Bureau.

STRINGS ATTACHED

As part of the deal to buy all of the Allbritton stations, Sinclair will spin off stations in the three markets to a third party. Sinclair was planning to provide support services to the stations after the sale, including acting as their agent in retransmission talks, according to the ACA, the trade group representing smaller, independent cable systems.

The bureau also said Sinclair needed to provide more information on those agreements, and to explain why not providing that data in the first place squared with a responsibility to “provide all information necessary to allow for meaningful review of the application in question.”

The ACA, among others, has asked the FCC to block such spinoff deals, saying they are a way to skirt its local-ownership rules and coordinate retransmission negotiations, raising prices to cable operators and, ultimately, consumers. A Sinclair spokesperson had not returned a request for comment at press time.

“ACA is pleased that the FCC’s Media Bureau is closely scrutinizing the Sinclair- Allbritton deal,” ACA President Matt Polka said following the FCC letter. “This level of inspection is appropriate and necessary, given the issues identified by the bureau and because the deal would permit Sinclair to increase its already prodigious market power over retransmission consent in two local TV markets through coordination agreements with stations owned separately in name only.”

ROCKEFELLER’S POINT

Sinclair did not seem particularly concerned. “That the FCC has raised certain questions about the transaction is normal course in transactions of this type and we expect to be able to address the FCC’s concerns without any material impact on the transaction,” it said.

In July, Sinclair said it had struck a $985 million deal with Allbritton for seven ABC affiliates, covering 4.9% of the U.S. TV households, and NewsChannel 8, a 24-hour cable-news network covering the Washington, D.C., metropolitan area.

Sen. Jay Rockefeller (D-W. Va.) has asked the FCC to hold off on decisions on the Sinclair and other deals involving sharing agreement spinoff s until the GAO can study the issue.

TAKEAWAY

Washington policymakers are taking a hard look at TV-station sales that include side deals involving shared services and their impact on retransmission consent.

WASHINGTON — Cable operators, led by the American Cable Association, continue to get some love from Washington in their efforts to block or condition station-group transactions with side deals involving shared sales, programming or management.

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