Sinclair sinks, Trump’s temper, Cox’s cash value

There’s something to be said for waiting before starting to write. That’s not my nature. I want to get things out first. I type very well but nobody can do it as quickly as my brain, so I often dictate into a phone and email myself. Then, I make any corrections and additions, and create the graphics and email preferences.

But this saga of Sinclair Broadcast Group trying to buy Tribune Media that has been going on for more than a year and suddenly failing last week – supposedly failing – is full of interesting details.

NO sinclair tribune

I wrote about a lot of them, Tuesday night. That was mostly background. You know how little I admire Sinclair and the people who run it. Tonight, you’ll see exactly what went wrong for the deal and what I think should be done. Let’s just say what went wrong could’ve been a lot of what I wrote Tuesday night!

I’m going to suggest starting by reading that last post, if you haven’t. It gives a lot of background about why Sinclair is so despised – that I’ve written about for months but conveniently put in one place – so there’s no sense repeating it here.

cox media group

But first, the latest, and that’s Cox Media Group – one of the best corporations owning TV stations out there, and a private one – is exploring putting itself up for sale.

Yesterday, FTVLlive’s Scott Jones got a secret copy of the talking points Cox managers are supposed to use while talking to employees. Let’s face it, “talking points” is another phrase meaning public relations. In other words, they’re trying to convince the workers to keep working extra hard because everything is going to be great! (I hope you used your best Tony the Tiger when you read that.)

Of course, that’s not how employees are feeling. When your company suddenly sets itself up to be bought, there is lots of uncertainty. You know spending will go down and jobs will not be filled, so the company’s financials look more attractive. And being bought by another major established company could lead to layoffs. But you know that’s not in the talking points which you can see below in this six-page slideshow.

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Cox’s 14 TV stations are pretty good and most are highly-rated ones. From left to right, by row, they’re the ABC affiliate in Atlanta; ABC and independent in Orlando; Fox in Boston; CBS in Seattle; NBC in Pittsburgh; ABC and independent in Charlotte; Fox and CBS in Jacksonville; Fox in Memphis; CBS in Dayton, Ohio; Fox in Tulsa, Okla.; and also a “supply-side platform that brings automation and data-driven targeting to the buying and selling of television advertising” called Videa.

cox stations

There are also 61 radio stations, 4 daily newspapers, 11 non-daily papers, 16 digital brands, and one local cable channel.

FTVLive’s Scott Jones also got a market analyst report from Wells Fargo about how much Cox Media may be worth. The answer it gives is $2.65 billion, but consider many factors including the number of willing buyers, whether the stations get split up, and whether Tribune goes back on the market.

wells fargo cox

See Tuesday’s post for a lot more links to, and details on, the rest of Atlanta-based Cox.

So FCC Chairman Ajit Pai was arguably putting himself on the line while supporting the Sinclair-Tribune merger when surprisingly, last week, he said in a statement:

“Based on a thorough review of the record, I have serious concerns about the Sinclair-Tribune transaction. … The evidence we’ve received suggests that certain station divestitures that have been proposed to the FCC would allow Sinclair to control those stations in practice, even if not in name, in violation of the law. … When the FCC confronts disputed issues like these, the Communications Act does not allow it to approve a transaction. Instead, the law requires the FCC to designate the transaction for a hearing in order to get to the bottom of those disputed issues.”

How surprising?

Pai embraced the merger so much, he’s under investigation by the FCC’s inspector general for allegedly greasing the wheels by bringing back the UHF discount rule weeks before the deal was announced. That way, the new, larger company could still meet the FCC ownership limit of 39 percent of U.S. households, rather than vastly exceeding them.

— UPDATE: The FCC inspector general cleared Chairman Ajit Pai of being unfairly biased in favor of the Sinclair Broadcast Group–Tribune Media merger. —

sinclair before tribune
Sinclair’s reach now, without Tribune

Then yesterday – at an awkward moment for Pai, Sinclair and Tribune – a Washington-based U.S. Appeals Court rejected a challenge to the FCC reinstating the UHF discount that could’ve and could still pave the way for the merger. The three-judge panel was comprised of two President Barack Obama nominees and one President Trump nominee. They dismissed the case on technical grounds without considering its merits, ruling the activist groups that filed suit hadn’t shown they’d be injured by the consolidation at the heart of their case. What this really means is Tribune could be worth more if it pulls out of the deal, because other potential suitors will have more flexibility to make offers. Tribune can leave Sinclair at the alter/chuppah on Aug. 8.

The UHF discount, started in 1985, let companies with UHF (channels 14+) stations only count half the coverage area towards the ownership limit. But that was when there was a big difference between watching channels 2 to 13, and channels 14+. With today’s technology – and cable, satellite and computers added to the mix, and broadcast signals digital rather than analog – the quality looks the same. The rule was ended in 2016, just before the end of President Obama’s administration.

So why bring back the rule last year? For big corporations, up against the ownership limit, urging Pai to reinstate it so they could buy more stations – exactly what Sinclair needed to merge with Tribune.

According to Variety, Commissioner Mignon Clyburn, the sole Democrat on the FCC at the time, warned it would diminish diversity, competition, and localism, and she predicted a wave of mergers and acquisitions.

Variety wrote at the time,

“She showed a chart from Bloomberg showing how major station groups benefit from the discount. The largest, ION Media, reaches 33.7% of the country with the discount, but 65.2% without. Univision reaches 23.6% with the discount, but 44.8% without. When the discount was repealed last summer, station groups were allowed to retain their existing holdings, but they would be forced to divest assets in the event of a merger or corporate takeover.”

tv owner population share

But Pai argued the FCC would start examining the media ownership cap and reinstating the UHF discount would give the FCC a “blank slate.” The examination started in December.

generic tvA year later, in April 2018, Variety reported a panel of appellate judges asked why the FCC reinstated the rule and raised some concerns. Two of the three judges on the D.C. Circuit Court of Appeals also expressed concerns the FCC had restored a rule that was considered obsolete.

According to Variety, Judge Gregory Katsas noted to the FCC’s attorney, James Carr, that while the FCC

“might want to raise the cap,” there was “no reason for thinking at that the end of the day, part of the solution will be keeping the discount.”

“I think that is probably fair, your honor,” Carr replied. He argued that the UHF discount shouldn’t be eliminated without considering its implications to the 39% cap.

Meanwhile, CEO Chris Ruddy of conservative TV news network Newsmax said, “The judges on the D.C. Circuit reviewing the FCC’s UHF discount were left scratching their heads wondering why the rule was re-instated when everyone — Republicans and Democrats alike — agree that the discount is an analog relic and makes no sense in a digital world.

“The FCC should avoid the appearance of impropriety and proceed with a transparent national ownership cap proceeding to set a level playing field before approving any merger that benefits just one company, namely Sinclair.”

He also said he told President Trump strict limits on national TV ownership are needed not only to keep a lid on Sinclair, but also on the ‘liberal’ broadcast networks.

I told him [Trump] about my opposition because Sinclair would reach 70 percent of U.S. homes and — while I don’t disagree necessarily with Sinclair’s editorial point of view — I did not want to see NBC and ABC and the big liberal networks…[reaching] 70 percent.

“I think that would have been very dangerous if NBC was dictating the local news coverage in Des Moines, Iowa,” Ruddy said.

Keep in mind, Ruddy’s Newsmax and also Sinclair want to challenge Fox News Channel for conservative news viewers.

Politico summed it up by saying,

“Sinclair has been a frequent target for Democrats and liberal groups disturbed by reports that it favors President Donald Trump in its coverage via ‘must-run’ segments pumped to its network of stations.”

During the 2016 presidential election, The Washington Post reported Sinclair

“gave a disproportionate amount of neutral or favorable coverage to Trump during the campaign” while airing negative stories on Hillary Clinton, and Politico reported “on a boast by Trump’s 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.”

Also, it was Trump who nominated Pai for the agency’s top post, so most experts felt the merger would eventually get the go-ahead due to President Trump’s public comments praising the media company, which boasts a conservative-leaning, anti-mainstream media news operation.

My last post mentioned many different cases of using shell companies under Sinclair’s control to still broadcast on more stations than allowed. Those so-called sidecar arrangements let Sinclair keep a stake in the revenue and programming of the spun-off stations.

I even asked, “Why was the FCC the last to find out? Or did it know and ignore the facts for political reasons?”

Today, I found a new example of a virtual triopoly (three stations in a market), when the FCC only allows duopolies (two stations in a market) and only under certain conditions.

So what changed? Politico reports problems in three cities.

WGN-TV

First, in Chicago, the plan was to sell

“WGN to Steven Fader, a Maryland business associate of Sinclair Executive Chairman David Smith who oversees car dealerships.”

According to Reuters,

“The draft order circulated by Pai’s office … said Sinclair’s actions around the divestiture of TV station WGN in Chicago ‘includes a potential element of misrepresentation or lack of candor.’”

Ouch! Not good for a company licensed to use the public airwaves. I used another example below and then offered a suggestion about what should happen to Sinclair.

Adweek added,

“The FCC feels Smith selling the asset to his friend and business associate presents a problem,”

and I’ll say the price of $60 million is ludicrous, considering the station is worth hundreds of millions of dollars.

According to The Chicago Tribune,

“The WGN services agreement would have kept Sinclair in charge of everything from programming to ad sales while giving it an option to buy back the station for the same price, subject to adjustments, within eight years.”

WPIX

Sinclair was also supposed to sell WPIX-New York, the nation’s largest TV market by far, for a measly $15 million to that same Cunningham Broadcasting, a company with close ties to the Smith family. That caused Pai to say he was concerned Sinclair’s proposed sales in Chicago and New York may have attempted to deceive the government.

Adweek said also troubling

“were the deals to sell stations in Dallas and Houston to Cunningham Broadcasting.”

The Tribune reported,

“The proposal also included an option to buy the stations back.”

According to Reuters,

“Separate filings with the FCC last month by the American Civil Liberties Union and conservative news outlet Newsmax Media” … raised “questions about whether Sinclair would continue to control some of the stations it proposes to divest.”

So Politico said,

“Pai announced an administrative law judge would review the station spinoff issues. The FCC takes that step when companies fail to persuade it that a transaction, even with conditions, would be in the public interest.”

Ars Technica reported the decision by FCC commissioners to adopt a Hearing Designation Order and have a judge review aspects of the deal was unanimous. Other options were

“denying the merger outright, approving the merger, or approving it with conditions.”

Click here for the full order. One of the key parts reads:

“Among these applications were three that, rather than transfer broadcast television licenses in Chicago, Dallas, and Houston directly to Sinclair, proposed to transfer these licenses to other entities. The record raises significant questions as to whether those proposed divestitures were in fact “sham” transactions. By way of example, one application proposed to transfer WGN-TV in Chicago to an individual (Steven Fader) with no prior experience in broadcasting who currently serves as CEO of a company in which Sinclair’s executive chairman has a controlling interest. Moreover, Sinclair would have owned most of WGN-TV’s assets, and pursuant to a number of agreements, would have been responsible for many aspects of the station’s operation. Finally, Fader would have purchased WGN-TV at a price that appeared to be significantly below market value, and Sinclair would have had an option to buy back the station in the future. Such facts raise questions about whether Sinclair was the real party in interest under Commission rules and precedents and attempted to skirt the Commission’s broadcast ownership rules. Although these three applications were withdrawn today, material questions remain because the real party-in-interest issue in this case includes a potential element of misrepresentation or lack of candor that may suggest granting other, related applications by the same party would not be in the public interest.”

This keeps getting better!at&t time warner

Politico said an administrative law judge was called in 2015 with the proposed Comcast-Time Warner Cable deal. The companies later abandoned it, rather than go through the hearing process. AT&T ended up with Time Warner, at least for now, after a federal judge allowed it without conditions, but the Justice Department is appealing.

By last Wednesday, Reuters reported Sinclair announced it would not divest the three TV stations currently owned by Tribune

“to ‘expedite’ the transaction after the FCC suggested the company would still control the stations,” and “two FCC officials who did not wish to be identified said Wednesday they believe the merger will not be able to proceed.”

Instead, Sinclair itself will acquire WGN-Chicago, and put KDAF-Dallas and KIAH-Houston into a divestiture trust and sold by an independent trustee (if the acquisition is finalized).

The Justice Department is also still reviewing the deal and the FCC may have even more concerns.

Sinclair denied any effort to mislead the FCC and issued this long statement:

“While neither Sinclair or Tribune have seen the draft HDO, Chairman Pai’s comments and press reports indicate the FCC is questioning the proposed divestitures in Dallas, Houston and Chicago.  Accordingly, in order to address such concerns and to expedite the Tribune transaction, Sinclair has withdrawn the pending divestitures of stations in Dallas (KDAF) and Houston (KIAH) to Cunningham Broadcasting Corporation and Tribune has withdrawn the pending divestiture of WGN in Chicago to WGN-TV LLC.  Sinclair intends to request permission from the FCC to put the Dallas and Houston stations into a divestiture trust to be operated and sold by an independent trustee following the closing of the Tribune acquisition.  Sinclair expects to have identified and entered into a purchase agreement with a third party buyer or buyers for the Dallas and Houston stations prior to closing.  As a result of the withdrawal of the application relating to WGN, Sinclair will simply acquire that station as part of the Tribune acquisition, which is, and has always been, fully permissible under the national ownership cap.

“Throughout the FCC review process of the Tribune merger and divestitures, Sinclair has had numerous meetings and discussions with the FCC’s Media Bureau to make sure that they were fully aware of the transaction’s structure and basis for complying with FCC rules and meeting public interest obligations. During these discussions and in our filings with the FCC, we have been completely transparent about every aspect of the proposed transaction. We have fully identified who the buyers are and the terms under which stations would be sold to such buyer, including any ongoing relationship we would have with any such stations after the sales. All relevant agreements documenting such terms as required by FCC rules have been filed. While we understand that certain parties, which oppose the transaction object to certain of the buyers based on such buyers’ relationships with Sinclair, at no time have we withheld information or misled the FCC in any manner whatsoever with respect to the relationships or the structure of those relationships proposed as part of the Tribune acquisition. Any suggestion to the contrary is unfounded and without factual basis.

“While the structures put forth to the FCC throughout the process have all been in compliance with law and consistent with structures that Sinclair and many other broadcasters have utilized for many years with the full approval of the FCC, we have consistently modified the structure in order to address any concerns raised by the FCC. As a result and in light of the ongoing and constructive dialogue we had with the FCC during the past year, we were shocked that concerns are now being raised. Nonetheless, we have decided to move forward with these additional changes to satisfy the FCC’s concerns.

“There can be no question regarding misrepresentation or character given that Sinclair has fully disclosed all terms of all aspects of the transactions it has proposed. The FCC’s reported concerns with sales to certain parties have been eliminated in light of the withdrawals of the applications relating to Dallas, Houston and Chicago. Accordingly, we call upon the FCC to approve the modified Tribune acquisition in order to bring closure to this extraordinarily drawn-out process and to provide certainty to the thousands of Tribune employees who are looking for closure.”

So what’s next for Tribune? Will it stick by the deal as it said it intends? We don’t know for sure yet, but it has until Aug. 8 and I already mentioned reasons to separate from Sinclair.

This video was made before Cox threw its assets into the ring.

One big winner, so far, could be 21st Century Fox Inc. chairman Rupert Murdoch, who has become close with President Trump.

Bloomberg notes, over the decades, Fox and Sinclair have been in business together, but the conservative organizations have also been rivals.

Sinclair owns dozens of local Fox affiliates. So does Tribune. Last year, Fox tried unsuccessfully to outbid Sinclair for Tribune.

In the meantime, the companies divide the retransmission fees paid by cable and satellite operators (meaning what you and I pay). Networks say local stations have more value because of them.

Former Fox exec Preston Paddon remembers in his blog,

“By 1992, Congress found that cable systems were paying carriage fees to the non-broadcast channels but not to the broadcasters, and that this was unfair to the broadcasters.”

It’s why we pay for free local TV if we’re not watching with an antenna.

Anyway, Sinclair buying Tribune and its own Fox affiliates would’ve given it a stronger negotiating hand in talks with Fox about how to divvy up those fees.

So after losing out on Tribune,

“Fox threatened to pull its affiliates from Sinclair and switch the stations to an independent broadcaster. Eventually, in order to satisfy regulators, Sinclair agreed to sell some Tribune stations to Fox, which, in turn, said it would renew Sinclair’s affiliation with more than two dozen stations.”

Now, Fox may be able to buy even more stations.

And “Sinclair may soon compete with Fox News for right-leaning TV viewers” may not come to pass. It has reportedly been talking about hiring former Fox News stars to create a block of conservative programming using WGN America, which it would acquire, or The Tennis Channel, which it already owns. Former Trump advisor Boris Epshteyn and former CBS correspondent Sharyl Attkisson already work for Sinclair. Politico reported Sinclair has even approached current and former Fox talent such as Jeanine Pirro, and Greta Van Susteren and Eric Bolling. I already wrote Talks with former Fox host Bill O’Reilly fell apart. Sinclair won’t admit to any of that.

Also, the Justice Department appealed the ruling that let AT&T buy Time Warner. That’s good for Fox at the moment because it involves Fox News Channel rival CNN, and may have kept Comcast/NBC from buying most of Fox, as it downsizes to become “New Fox.” Murdoch prefers Disney/ABC buying the assets, which the government already approved, and “the Murdoch family would see more tax benefits in that deal.”

So what’s President Trump’s beef? You already read about his relationship with Sinclair.

Tuesday night, he tweeted it was “sad and unfair that the FCC wouldn’t approve the Sinclair Broadcast merger with Tribune,” but Republicans control the FCC, he appointed Ajit Pai as chairman, and Pai has been accused of being too cozy with Sinclair. But except for appointments, the FCC is independent from the White House.

Deadline reported Sinclair commentator Boris Epshteyn, who used to work for Trump, is for the deal. So is Steve Bannon, who got friendly with Sinclair stations in swing states before the election. And Trump has to like Sinclair’s publicity.

The only Democratic FCC commissioner at the moment tweeted her response to the president with just one word: disagree.

But Trump’s friend Rupert Murdoch – who also owns TV stations and the pro-Trump Fox News Channel – is said to be against the merger. That would be especially so if Sinclair starts putting conservative news on cable through WGN America and The Tennis Channel. Trump is so chummy with Murdoch, he called in December to congratulate him on the Disney-21st Century Fox deal.

I wrote another friend, NewsMax chief Chris Ruddy, is definitely against Sinclair-Tribune, as well.

Furthermore, the president compared Sinclair-Tribune to letting “Liberal Fake News NBC and Comcast (get) approved” which happened under the Obama administration and FCC. Trump criticized it as being too big.

He didn’t mention it’s on the level of AT&T-Time Warner, which a federal judge recently allowed but the Justice Department is appealing.

The difference between Sinclair-Tribune and Disney-Fox – and NBC-Comcast and AT&T-Time Warner – is that the first pair involve companies that make content but don’t distribute it. In the second pair, NBC and Time-Warner make content, but Comcast and AT&T actually distribute it — Comcast through cable and AT&T by DirecTV satellite, both of which are paid subscription services.

In April, Axios reported President Trump defended Sinclair after the company started

“forcing conservative, pro-Trump editorials on its” news anchors and “Deadspin created a video of Sinclair broadcasters spurning ‘fake news.’

Viewers of Sinclair’s 200-plus local stations had already seen “centrally drafted opinion items reflecting its conservative, often pro-Trump positions,” but not by their own local anchors and certainly not side-by-side along with so many others.

That was at 6:34am. Keep in mind, a great number of Sinclair’s stations are affiliated with the networks.

Then, at 6:58, Trump took on CNN…

and got pushback from its PR department.

CNN reports some Sinclair journalists said they were unhappy with President Trump’s portrayal of the company as “conservative” because they want to be recognized for their straight-forward, nonpartisan work. Despite their stations being forced to air pro-Trump commentaries and stories, most journalists at local stations don’t want to be labeled by the president or anyone else.

As for Sinclair’s claim of more localism if the deal goes through, FTVLive’s Scott Jones found Sinclair station WSYX-Columbus, Ohio, doing a series of reports called “Gator Week” (as opposed to Shark Week, that has been on the Discovery Channel since 1988). Still, Jones thought it was “odd” considering “you don’t see many alligators in Ohio.” Then, he found out about other Sinclair stations doing the same thing, “including WGXA (Macon, Ga.), WPMI (Mobile, Ala.), WPEC (West Palm Beach) and others.” He joked he wasn’t sure it was a must-run.

I, myself, found Shark Week on a retweet from the Cunningham Broadcasting station in mid-Michigan. Maybe WBSF was allowed to go a different route.

WBSF’s “About” section says it’s “owned and operated by Cunningham Broadcasting Corporation and receives certain services from an affiliation of Sinclair Broadcast Group.” So there are three terms/phrases: owned, operated, and “receives certain services from an affiliation of Sinclair Broadcast Group.” Maybe that’s because just above, it says to send all press releases to news@nbc25news.com. So maybe “certain services from an affiliation of Sinclair Broadcast Group” includes press releases.

But wait!

Below, there are nbc25news email addresses for comments, webmaster (the Sinclair owned, operated, and apparently “affiliated” websites all look similar), contests and weather.

And below that are Sinclair (sbgi.net) email addresses for corporate, two for national advertising, and the secondary person for closed-captioning concerns.

So maybe those are all the “certain services from an affiliation of Sinclair Broadcast Group.”

That’s all very interesting since I knew Sinclair controlled two other stations in the same location!

NBC affiliate WEYI has on its “about” section (with the same look) that it’s “owned and operated by Howard Stirk Holdings, LLC and receives certain services from an affiliation of Sinclair Broadcast Group.” That entire phrase is merely a substitution for Armstrong Williams’ company and we established in my last post that WEYI is one of a few Howard Stirk stations run by Sinclair. They also use the nbc25news email, but it’s more appropriate here.

Then there’s Fox affiliate WSMH that has on its “about” section (with the same look, of course) that it’s – wait for this! – actually “owned and operated by Sinclair Broadcast Group.” The email addresses are all wsmh.com. The “receives certain services” phrase is not there.

I did notice after the paragraph with the name of the owner, etc., and ties to Sinclair, is another called “Community Involvement.”

What’s funny is that all three stations start with “The owner and Sinclair Broadcast Group, LLC. continue to broaden its recruiting outreach…”

That means “the owner” can be whichever company actually holds the station license and it’s not named here, just referred to as “the owner,” out of laziness.

But what’s especially funny here is saying “The owner and Sinclair Broadcast Group” when Sinclair is really the owner!

But seriously, how does Sinclair operate the three stations with the same address, etc.? We learned in my last post that’s not allowed in Baltimore, with Sinclair, Cunningham and Deerfield Media. In fact, in Nov., 2012, TVNewsCheck reported the situation as “a virtual triopoly.”

The FCC’s webpage called Broadcast Ownership Rules clearly states in its section, Local TV Multiple Ownership:

“An entity is permitted to own up to two TV stations in the same Designated Market Area if either:

  • “The service areas – known as the digital noise limited service contour – of the stations do not overlap

  • “At least one of the stations is not ranked among the top four stations in the DMA (based on audience share), and at least eight independently owned TV stations would remain in the market after the proposed combination”

That’s the summary in its entirety! The stations cover the same area. An old website reports “eight full-power television stations in the Flint-Saginaw-Bay City market,” the others being CBS and ABC affiliates, two PBS affiliates and a religious broadcaster.

And the NBC, Fox and CW stations are controlled by the same company, for all intents and purposes. I’d bet the CW station is not in the top four rated, but the rules are for an entity “to own up to two TV stations” – just two!

(The MyNetworkTV affiliate is on a sub-channel of the CBS affiliate.)

I just found the mid-Michigan situation by accident and wonder how many other cities this has been going on in.

TVNewsCheck’s Harry A. Jessell put it this way, and then made lists of winners and losers at this point:

“Its mishandling of its merger application has badly stained its permanent FCC record in a way that could greatly complicate its future regulatory dealings. … And a liar is what the FCC has accused Sinclair of being by obfuscating the fact it would continue to control three major market stations that it told the FCC it would spin off to other broadcasters to comply with ownership limits.

“You see, the FCC acts on the honor system. It presumes that you are obeying all the rules and expects you to confess any infractions. It’s the principal way the FCC polices those it regulates. That’s why lying – the ever-polite FCC calls it “misrepresentation” or “lack of candor” – is taken seriously and is the FCC equivalent of a capital crime. … As the lawyers pointed out to me this week, once indicted for misrepresentation as Sinclair has now been, it sticks because it goes to the broadcaster’s basic character qualifications to be a licensee. It cannot buy or sell a station or even renew a license until it resolves the character question. Sinclair’s best move now is to walk away from the merger and promise, no, swear on a stack of Bibles, that it will never, ever mislead the FCC again.

“Sinclair has no one but itself to blame for this fiasco. It pushed too hard to keep as many of the Tribune stations as it could and somewhere along the line lost sight of the larger goal – get the transfer through the FCC and get to closing. … (David Smith) kept going back to the FCC (and the Justice Department) demanding more and more. Ironically, he will likely end up with nothing, except maybe a new set of regulatory hassles.”

Bloomberg quotes B. Riley FBR Inc. analyst Barton Crockett, who said in a note he has

“never seen such ‘harsh’ language from the FCC about an applicant for a merger. The ‘vitriolic’ tone of the FCC statement makes it dubious that Sinclair and Tribune will be able to come back with divestitures that will satisfy the FCC.”

Bottom line: Anyone who knows me knows I can be tough, especially on myself. The people who run and invest in the nation’s largest media company have been breaking rules all over the place for many years. It’s time the FCC gets extremely serious so it’s taken seriously when protecting the public interest from those using the public airwaves.

Does anyone remember the RKO situation? Have a seat and look for similarities. (I wrote this with information from several Wikipedia listings.)

RKO General 1962
1962 logo

RKO General was the main holding company through 1991 for the non-core businesses of the General Tire and Rubber Company.

It had been in broadcasting since 1943, and General Tire bought the RKO Radio Pictures movie studio in 1955, but dissolved it in 1959. From then until 1991, it operated six TV stations and more than a dozen radio stations. It also holds the record for the longest licensing dispute in television history.

KHJThe trouble began in 1965. RKO General applied for license renewal of KHJ-TV in Los Angeles (now KCAL-Channel 9). A local group, Fidelity Television, challenged it, charging RKO with second-rate programming, and later and more seriously, that General Tire conditioned its dealings with certain vendors on the basis they’d buy advertising time on RKO General stations. These “reciprocal trade practices” are considered anti-competitive. RKO and General Tire executives testified before the FCC and rejected the accusations. Four years later, in 1969, the commission issued an initial finding that Fidelity’s claims were correct.WNAC RKO

That same year, RKO faced a license challenge for WNAC-TV in Boston (now WHDH-Channel 7, not to be confused with the old WHDH-Channel 5), again charged with reciprocal trade practices.

WOR RKOFour years later, in 1973, the FCC ruled in favor of RKO in the Los Angeles case, pending findings in the still-ongoing Boston investigation. The next year, in 1974, when RKO applied for license renewal of WOR-TV in New York (now WWOR-Channel 9, technically Secaucus, NJ), the FCC conditioned the renewal on the Boston case as well.

SIDEBAR: Another Boston FCC case lasted 15 years – not the record, but from sign-on to sign-off – and involved the former WHDH-Channel 5. The DuMont Television Network applied for a construction permit for the channel, but shut down its network before getting it. The Boston Herald Traveler Corporation got the license, signed on in 1957, and shortly after, the FCC started investigating allegations of impropriety in the granting of the television license. (Allegedly, the controversy was over luncheon meetings the newspaper’s chief executive had with an FCC commissioner during the original licensing process.) So the old channel 5 (WHDH) never had a license longer than six months at a time while the standard was three years.

Eventually, the FCC ordered comparative hearings and in 1969, a local group called Boston Broadcasters was granted a construction permit for a new station on channel 5 called WCVB after it promised to air more local programming than any other station in America at the time. That’s even though the old channel 5 (WHDH) often broadcast more local programming than any other commercial TV station in Boston. Herald-Traveler Corporation lost its court case in 1972 and WCVB went on the air in its place. Luckily, everyone on the old channel 5 moved to the new channel 5 which still broadcasts from the suburb of Needham, since the old WHDH-TV refused to sell its studios, transmitter and tower to the new WCVB, which is now owned by Hearst.

NOW BACK TO THE STORY: In June, 1974, an administrative law judge renewed the WNAC-Channel 7 Boston license even after finding General Tire and RKO General had engaged in reciprocal trade practices. In December, 1975, a company competing for the license called Community Broadcasting asked the FCC to revisit the case. It alleged General Tire bribed foreign officials, maintained a slush fund for U.S. political campaign contributions, and misappropriated revenue from overseas operations. RKO denied all the allegations during a year-and-a-half series of proceedings. Then, in July, 1977, General Tire admitted to an eye-popping litany of corporate misconduct, including the bribery and slush fund charges, in order to settle an action brought by the Securities and Exchange Commission. But the TV situation wasn’t over yet. Still, the RKO proceedings dragged on!

Finally, in 1980, after a half-decade of hearings and investigations, the FCC stripped RKO of WNAC’s license. It found RKO “lacked the requisite character” to be the station’s licensee and gave as examples, the reciprocal trade practices of the 1960s, false financial filings by RKO, and General Tire’s gross misconduct in non-broadcast fields.

But the worst was RKO’s dishonesty before the FCC. During hearings, RKO withheld evidence of General Tire’s misconduct, including the fact the SEC had been investigating the company in 1976. RKO also denied it had improperly reported exchanges of broadcast time for various services, despite indications to the contrary in General Tire’s 1976 annual report. So the FCC found RKO had displayed a “persistent lack of candor” over its own and General Tire’s misdeeds, which threatened “the integrity of the Commission’s processes.” That FCC ruling meant RKO lost the KHJ-TV Los Angeles and WOR-TV New York licenses as well.

RKO appealed to the District of Columbia U.S. Court of Appeals, which upheld the revocation solely on the basis of RKO’s lack of candor. It wrote in its opinion, “[t]he record presented to this court shows irrefutably that the licensee was playing the dodger to serious charges involving it and its parent company.” But the court interpreted the candor issue so narrowly that it applied only to WNAC-TV, and ordered rehearings for WOR and KHJ. RKO General appealed again, this time to the U.S. Supreme Court. In 1982, SCOTUS refused to review the license revocation, and it was over. RKO General sold WNAC’s assets to New England Television (NETV), a new company from the merger of Community Broadcasting and another competitor for the license, the Dudley Station Corporation. The FCC granted a full license to NETV on channel 7, which it renamed WNEV-TV. Since then, the station changed its call letters to WHDH-TV, had low ratings, and was sold to Ed Ansin’s Sunbeam Television Corporation. (This WHDH has no relation to the old WHDH-Channel 5.)

It could’ve been worse. In 1983, the FCC began taking competing applications for all of RKO’s broadcasting licenses, but Congress passed a law sponsored by Sen. Bill Bradley requiring the commission to automatically renew the license of any commercial VHF-TV station relocating to a state without one, meaning New Jersey and Delaware. Two months later, RKO General officially changed WOR’s city of license from New York to Secaucus, NJ, where it remains on paper. The FCC made the station move its main studio there and step up coverage of events in the Garden State. Still, WOR maintained its identity as a New York station. (It’s now owned by Fox, which also owns WNYW-Channel 5, and got rid of channel 9’s newscasts.)

In 1984, RKO sold its Radio Networks operation to United Stations. In 1986, under pressure, RKO put WOR up for sale. MCA/Universal won the bidding war and the FCC approved the purchase. In 1987, MCA changed the call letters to WWOR. (Remember the slogan Universal 9, about 15 years before NBCUniversal was formed?)

RKO was lucky it sold WOR. In 1987, an FCC administrative law judge found it unfit to be a broadcast licensee due to a long history of deceptive practices he called the worst case of dishonesty in FCC history, and ordered RKO to surrender the licenses for its two remaining two TV stations and 12 remaining radio stations. RKO declared all of the employees responsible for the misconduct had been fired and appealed, claiming the ruling was deeply flawed. But the FCC made it clear it would probably reject any appeals and strip the licenses, and urged RKO to sell everything before that became necessary.

In 1988, under an FCC-supervised deal, the license of KHJ-Los Angeles was granted to Fidelity, the company that had originally challenged RKO General. Fidelity then transferred it to Disney, before it bought ABC, for $324 million. RKO got about two-thirds and Fidelity got the rest. By 1991, everything was sold. (Fort Lauderdale-Miami’s WAXY-FM 105.9 – which labeled itself “an RKO radio station” before giving its call letters, near the end – was sold in 1990. That was 28 years ago! Unbelievable!)

TVNewsCheck’s Harry Jessell put it this way:

“When people are making comparisons between your station group and RKO General, you know you have screwed up.”

I think there are too many changes going on in the industry right now as technology improves so quickly. Jessell mentioned certain former FCC commissioners would’ve gone the RKO route with Sinclair. I agree because now more than ever, broadcasters use the public airwaves and must pay us back with public service under tougher rules than its competitors. And the FCC needs complete and total honesty, with so much on its hands.

Sinclair needs to be brought down similarly for all it has done, with the same family as owners and no concern for anything but profit over the decades. The stations should be separated. Local broadcasters or broadcasting groups with no other industry interests should be given first shot at the stations. Then, they can hire experienced people with original ideas, and decisions would be made right there in the studio building.

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The Weather Channel’s new owner, a real controversial person

There are two big changes in weather: The snow has stopped and The Weather Channel is being sold.weather channel logo

Also, you can say the owner is a real person for two more reasons: The new owner is not a partnership between three corporations, like in the past – and he was one of the stars of the TV show Real People!

Deadline magazine reports Byron Allen bought the Weather Group, parent company of The Weather Channel TV network, for about $300 million. His wholly-owned Entertainment Studios paid a lot less than the $3.5 billion the owners spent for the company in 2008. IBM bought The Weather Company’s digital Product and Technology Businesses – WSI, Weather.com, Weather Underground and The Weather Company brand – in 2015.

Entertainment Studios logo

The Weather Channel and Local Now streaming service had been owned by The Blackstone Group, Bain Capital and Comcast/NBCUniversal. Deadline pointed out those groups “experimented with longer-form programming and big-name talent” such as Al Roker and Sam Champion.

It also said Allen, “comedian-turned-entrepreneur, has been growing his Entertainment Studios, which became the largest independent producer of first-run syndicated programming.”

byron allen
http://www.es.tv/trending-funny/

Allen has also been busy in court. In April 2017, a federal judge denied Charter Communications’ Motion to Dismiss his $10 billion lawsuit for racial discrimination in contracting.

Allen said at the time,

“This lawsuit was filed to provide distribution and real economic inclusion for 100% African American-owned media. The cable industry spends $70 billion a year licensing cable networks and 100% African American-owned media receives ZERO. This is completely unacceptable. We will not stop until we achieve real economic inclusion for 100% African American-owned media.”

Allen had also sued Comcast, Time Warner Cable and Rev. Al Sharpton for $20 billion, claiming “black media companies receive a small share of the annual spending on cable licensing.”

He claimed,

“The industry spends about $50 billion a year licensing cable networks in which 100 percent African American-owned media receives less than $3 million per year in revenue from that $50 billion stream of money that is spent to acquire content.”

comcast new 595x227

Allen also accused media companies of adding insult to injury by throwing money at Sharpton, employed by Comcast-owned MSNBC – saying they used “the least expensive negro” to “cover” up their track record of “blatant” discrimination.

On top of that, Allen called President Obama “bought and paid for” by Comcast.

“What happened in the Obama administration is former (FCC) commissioner Meredith Attwell Baker voted for the merger of Comcast NBCU and then 90 days later took a much higher paying job with Comcast after granting them the merger,” Allen said. “That was betraying the public’s trust as a public service.”

As of April 2017, that suit was pending. At least part of it had been dismissed, but Allen was appealing. I could not find anything on Entertainment Studios’ website while searching for Comcast, Warner, Time-Warner, or Sharpton.

Byron Allen: Black people are doing worse under President Obama.

Byron Allen standing by his controversial comments.

But he sued AT&T and forced the company’s subsidiary DirecTV to pick up seven Entertainment Studios Networks channels.

Real People cast
Did you watch NBC, Wednesdays 8-9pm, 1979-84? Top: John Barbour, Sarah Purcell, Skip Stephenson, Byron Allen; Bottom: Bill Rafferty

Looks like Allen has turned out to be the most successful of the Real People cast!

A look back at Real People:

Byron Allen heads to cheerleading school:

Byron Allen visits a bar on Venice Beach where disco on skates is king:

Byron Allen visits the experimental aircraft convention and talks to vets:

The syndicated Byron Allen Show, 1989-92.

We may have learned the fates of seven TV stations that will be divested if the $3.9 billion Sinclair-Tribune merger I’ve written against time and time again is allowed to happen.

Apparently, they won’t be going far – just to Armstrong Williams.

armstrong williams
http://www.armstrongwilliams.com/

Wikipedia calls him “an American political commentator, entrepreneur, author of a nationally syndicated conservative newspaper column, and host of a daily radio show and a nationally syndicated TV program called The Armstrong Williams Show.” The South Carolina native is also the largest African-American owner of television stations in the U.S.

I also can’t leave out the unbelievable: He served as “legislative aide and advisor to Sen. Strom Thurmond.” Yes, the same Strom Thurmond who The New York Times remembered ran

“for president in 1948 as what the press called a Dixiecrat.” …

“He said that ‘on the question of social intermingling of the races, our people draw the line.’ And, he went on, ‘all the laws of Washington and all the bayonets of the Army cannot force the Negro into our homes, into our schools, our churches and our places of recreation and amusement.’

“His opposition to integration, which he often attributed to Communism, was the hallmark of his career in Washington until the 1970’s. In 1971, he was among the first Southern senators to hire a black aide — in recognition of increased black voting resulting from the legislation he had fought. From then on, black South Carolinians, like all other residents, benefited from his skills as a pork-barrel politician who took care of the home folks.

“‘We’ve looked out for the state,’ he said in a 1999 interview, ‘and everything that was honorable to get, we got it.’”

strom thurmond
via U.S. Senate Historical Office

According to a Senate website, “He turned 100 years old in 2002, becoming the oldest person ever to serve as a senator. He also holds the Senate’s record for the longest individual speech, his filibuster against the 1957 Civil Rights Act.” He retired Jan. 3, 2003, and died that June.

According to The Times, “Mr. Thurmond always insisted he had never been a racist, but was merely opposed to excessive federal authority.”

So that was Armstrong Williams’ boss at one point. Wikipedia adds,

“He is principal in Howard Stirk Holdings, a media company affiliated with Sinclair Broadcasting that has made numerous television station purchases.”

The name of the company came from both William’s mother’s middle name, Howard, and his father’s middle name, Stirk.

On President Trump’s “s__thole countries” comment: “An indictment about what’s in his heart.”

African-American conservative and South Carolina native talks about removing the Confederate flag.

Sinclair has been known for using shell corporations like Cunningham Broadcasting to own stations while Sinclair actually operates them, including programming them and doing everything else true owners would do, as an attempt to get by the rules.

Williams has been in business with Sinclair – a corporation with overtly and pushy conservative leanings – before.

Armstrong Williams on President Obama’s “arrogant and dictatorial style.”

The backstory is that Williams helped Sinclair buy Barrington Broadcasting. He got NBC affiliate WEYI-TV in Flint-Saginaw-Bay City, Mich., and CW affiliate WWMB in Myrtle Beach-Florence, S.C., BUT according to Wikipedia,

“Both stations remain operated by Sinclair under a local marketing agreement, which resulted in allegations that the company was simply acting as a ‘sidecar’ of Sinclair to skirt FCC ownership rules. Williams defended the allegations, noting that he had full control over their programming, and received the majority of their revenue.”

He did buy five other stations, three from Sinclair.

Williams’ website has the headline “Howard Stirk Holdings seeks to acquire 7 local affiliates in early 2018!” (really in six cities) and a picture with logos, but no article. At least it says “seeks.”

new HOWARD STIRK

I found connections to the Sinclair-Tribune deal in all the stations pictured, with just a question about one.

Let’s take a look at the stations (clockwise on above graphic):

* Sinclair’s WLRH-35 in Richmond, Va. (Fox affiliate with CW on subchannel), since Tribune owns competitor WTVR-6 (CBS affiliate).

map Harrisburg Indy Greensboro

* North Carolina’s Triad (Greensboro, Winston-Salem, High Point) is where I have my big question. Sinclair owns WXLV-45 (ABC affiliate) and also WMYV-48 (MyNetworkTV affiliate). Tribune owns WGHP-8 (Fox affiliate). I would expect one of those three to go, but the logo on Armstrong Williams’ website is for WCWG-20 (CW affiliate). Just last month, Hearst bought that station from Lockwood Broadcast Group, but it had already been operating the station under a shared services agreement. Hearst also owns the market’s NBC affiliate, WXII-12, making a duopoly. How any other owner would fit in, since Hearst just finished the sale and got a duopoly last month, is a mystery to me – unless The CW plans to change its affiliated station in the market. Note the station already has a good owner that puts a newscast on it, but nothing – not even public service — compares to money when it comes to broadcasting. (Also keep in mind, a month ago, Sinclair made a case to the FCC it should be able to own more than one of the top four stations in Harrisburg, Indianapolis and Greensboro, N.C.)

kdnl people* Sinclair’s KDNL-30 in St. Louis. This weak ABC affiliate with lousy ratings canceled its local news in 2001. From 2011 to 2014, a competitor aired news for it at 5 and 10:00. Then came a year with Family Feud and Who Wants to Be a Millionaire instead of news. Since 2015, it has been airing The Allman Report, which says it has a “debate-driven format,” at 5 and 10pm, and 6:30am. But what about news? Click here for the station’s website’s People page. Notice it’s empty! Tribune owns two competitors in St. Louis: KTVI-2 (Fox affiliate) and KPLR-11 (CW affiliate). Sinclair filed to own two stations in this market. The St. Louis situation could come down to which stations are and are not part of the top four rated in the city, per FCC rules. Read below for details.

* Tribune’s KZJO-22 in Seattle (MyNetworkTV affiliate), since Tribune also owns KCPQ-13 (Fox affiliate that Fox itself really wants to buy), and Sinclair owns both KOMO-4 (ABC affiliate) and KUNS-TV51 (Univision affiliate) there.

* Sinclair’s KOKH-25 (Fox affiliate) and KOCB-34 (CW affiliate) in Oklahoma City. Tribune owns both KFOR-4 (NBC affiliate) and KAUT-43 (independent) there.

* Dreamcatcher Broadcasting’s WGNT-27 (CW affiliate) in Norfolk, Va., which is operated by Tribune, while Tribune also owns WTKR-3 (CBS affiliate) there. Sinclair owns WTVZ-33 (MyNetworkTV affiliate) in Norfolk.

sinclair before tribune
Sinclair currently, without Tribune, from http://sbgi.net/tv-stations/

No price has been announced, but it was reported a few weeks ago Sinclair will sell WPIX-New York for a measly $15 million to Cunningham Broadcasting, owned by Sinclair’s founder’s survivors, and WGN-TV Chicago for just $60 million to Steven B. Fader, chairman of Baltimore-based Atlantic Capital Group and business partner of Sinclair executive chairman David Smith in Atlantic Automotive Corp.

That’s peanuts. Pennies on the dollar. No stations above even come close to WPIX-New York or WGN-TV Chicago, each worth hundreds of millions of dollars, maybe a half-billion. But Sinclair will get to run them and possibly buy them back within eight years, if the rules are relaxed further by then.

Both Sinclair and Tribune own many TV stations. You just got a taste of how each company by itself owns several stations in several cities, and that number grows very large – too large for federal regulations – if combined. That means some stations will have to be spun off.

As I’ve written, Fox has wanted to buy several of those stations, especially Fox affiliates in cities with NFL football teams. Both Sinclair and Tribune own several Fox affiliates.

map seattle sacramento san diego salt lake city denver clevelend miami

According to Deadline magazine last month,

“Fox is in talks to acquire at least six stations from Sinclair, a source confirms. Discussions center Tribune-owned Fox affiliates in five markets — Seattle (KCPQ), Denver (KDVR), Salt Lake City (KSTU), Sacramento (KTXL) and Cleveland (WJW) — and a CW affiliate in greater Miami (WSFL) … contingent upon Sinclair winning regulatory approval for its $3.9 billion Tribune acquisition.”

Whether Fox will get to buy those stations remains to be seen. That’s because:

— Sinclair is already the nation’s largest TV station owner, based on the number of Americans its stations reach. That’s how the count goes, and Sinclair wants as many different people watching its stations – or able to pick them up – as possible. It probably won’t sell more than what’s necessary.

— Of course, it helps to own more than one station in a city, since synergies can save millions of dollars. As a small example, the company will only need one person to answer the phone. Both companies have pushed the legal limit on duopolies, and Sinclair has already asked for waivers. Again, it probably won’t sell more than what’s necessary.

— Fox will need money to buy all those stations, and it planned to sell its film, television, 22 regional sports networks and international businesses to Disney for $52.4 billion – but that plan is no longer certain.

There could be two stumbling blocks for Fox to sell everything but its broadcast network, TV stations, news and business channels, and its FS1/FS2 cable channels.

Reuters reported a group called Protect Democracy Project sued in District Court in Washington for any records of communications on the deal between the White House and the Justice Department, plus “any related antitrust enforcement efforts by the DOJ, to find out whether the president or his administration is improperly interfering with the independence of the DOJ out of favoritism for a political ally.”

According to White House Press Secretary Sarah Sanders, President Trump attacked AT&T’s $85.4 billion bid for Time Warner. However, he even spoke to Fox owner Rupert Murdoch in December and congratulated him on his Disney deal!

at&t time warner

Fox owns Fox News Channel, which Trump likes, and Time-Warner owns CNN, which the president does not like.

The other problem with the Fox-Disney deal is that it included Fox’s stake in Sky Plc, over in the U.K. The Sporting News called the British satellite broadcaster “one of the most attractive and important assets in the Disney-Fox deal.”

sky news logo

Fox owns 39 percent of it and “has been in a more than year-long fight with regulators in the U.K. to … buy out the remaining 61%” for $15 billion but late last month, Comcast outbid Fox, offering $31 billion for Sky. That’s 16 percent more.

comcast
March 7

Funny thing is, Comcast had originally even offered more than Disney for all those Fox assets but was rejected!

But let’s be clear on Federal Communications Commission rules on broadcast ownership limits.

fcc logo

It says the FCC

“sets limits on the number of broadcast stations – radio and TV – an entity can own, as well as limits on the common ownership of broadcast stations and newspapers. As required by Congress, the FCC reviews its media ownership rules every four years to determine whether the rules are in the public interest and to repeal or modify any regulation it determines does not meet this criteria.”

*Newspaper and Broadcast Station Cross-Ownership: No “common ownership of a full-power broadcast station and daily newspaper if” the station completely encompasses the newspaper’s city of publication, and they’re in the same Nielsen market, except if the newspaper or broadcast station is failed or failing (or they were grandfathered in). I’ve even come out in support of Fox saving the New York Post from extinction!

*National TV Ownership: No limit on the number of TV stations. (It used to be five.) Now,

“a single entity may own nationwide so long as the station group collectively reaches no more than 39 percent of all U.S. TV households. For the purposes of calculating the ‘national audience reach,’ TV stations on UHF channels (14 and above) count less than TV stations operating on VHF channels (13 and below), this is also known as the UHF Discount.”

generic tvThe UHF Discount – established in 1985, according to Variety – only mattered when we used antennas because UHF stations had weaker signals and were harder to watch. That’s why they only counted half as much as a VHF station. (It wasn’t until 1965 that the FCC required all new TV sets sold in the U.S. to have built-in UHF tuners to receive channels 14+!)

In 2016, the FCC led by Democrats discontinued it because with digital broadcasting, along with cable and satellite, it’s not needed anymore. But big broadcasters wanted to grow larger than the 39 percent rule would allow (especially Ion Media, a major UHF group). In April 2017, the FCC led by Republicans brought it back!

Ajit Pai fcc wikipedia
Ajit Pai (Wikipedia)

The reason was (arguably) to allow the Sinclair-Tribune merger, and FCC chairman Ajit Pai – appointed by President Trump – is under investigation by his agency’s inspector general for his role in that. (Considering today’s technology, can you think of any other reason the FCC brought it back?) Then, in December 2017, the “FCC voted … to launch a review of the FCC’s national 39% broadcast audience reach cap,” according to Broadcasting & Cable magazine. B&C also reported Pai claimed “he was restoring the discount … to consider it in tandem with the (39 percent) cap.” Plus,

“We need to take a holistic look at the national cap rule, including the UHF discount,” Pai said of the item. “The marketplace has changed considerably due to the explosion of video programming options and various technological advances that have occurred since the cap was last considered in 2004. So we need to examine whether our rules should change accordingly.  That’s an important discussion that will be informed by the facts in the record—not anything else.”

It also quoted dissenting Commissioner Mignon Clyburn as saying,

“Giving a single broadcaster the means to buy up enough local stations to exceed the 39% cap is inconsistent with the statute and must be rejected.”

*Dual TV Network Ownership: No merger between ABC, CBS, Fox, and NBC. Remember how NBC’s old Red and Blue radio networks were separated?

*Local TV Multiple Ownership: A company can own up to two TV stations in the same area if either:tv airwaves

*The service areas – known as the digital noise limited service contour – of the stations do not overlap. (I take this to mean Grade B overlaps, where people living in between two markets – like central New Jersey in between New York and Philadelphia, and Boca Raton in between Miami and West Palm Beach – can pick up stations in both cities that are owned by the same company. But, for example, CBS owns stations in New York, Philadelphia and Baltimore, so there must’ve been waivers.)

girl watching tv     *At least one of the stations is not ranked among the top four stations in the DMA (based on audience share), and at least eight independently owned TV stations would remain in the market after the proposed combination. This is important: ratings and number of competitors. Keep them in mind as you read further. According to Wiley on Media, “The Commission determined that a minimum of eight independently owned and operated television stations was required to preserve competition in local television markets” and “The FCC concluded that top four station combinations had the potential to provide a single firm with an unacceptably high market share.” This is why Sinclair-Tribune can’t simply keep the two highest-rated stations in a big city if the sale goes through, or more than one in a smaller city.

*Local Radio/TV Cross-Ownership: Restrictions are based on a sliding scale that varies by the size of the market.

*In markets with at least 20 independently owned “media voices” (defined as full power TV stations and radio stations, major newspapers, and the cable system in the market) an entity can own up to two TV stations and six radio stations (or one TV station and seven radio stations).

*In markets with at least 10 independently owned “media voices” an entity can own up to two TV stations and four radio stations.

*In the smallest markets an entity may own two TV stations and one radio station.

*Local Radio Ownership: Restrictions are also based on a sliding scale that varies by the size of the market, but there’s no need to go into it here.

So the bottom line for now is that at this point, we’re learning some more about what Sinclair and Tribune intend to do with other stations they won’t be allowed to keep if their deal goes through — but whether their deal goes through — and whether Fox is able to buy the stations it wants because Comcast outbid Disney for Sky, but still needs approval — is up in the air(waves).

Please, if you like what you read here, subscribe to CohenConnect.com with either your email address or WordPress account, and get a notice whenever I publish.

P.S. In the spirit of weather, here were Casey and Frisky yesterday. As usual, Frisky (left) was more interested in Mother Nature’s show than Casey (right).

WSVN without Fox? It’s possible if….

Surprisingly, I haven’t seen this reported at all by South Florida media. Yes, they’re still consumed and reeling from the massacre at Marjory Stoneman Douglas High School on Valentine’s Day, but this involves THEM, darnit, and they know it.

generic newspaper

There was nothing in the Miami-Herald, Sun-Sentinel, or New Times about it, nor TV stations WSVN and WSFL which could be at the center of it.

It’s the possibility WSVN-Channel 7 in Miami-Fort Lauderdale may lose its Fox affiliation.

I told you here, here, here and here, if the Sinclair-Tribune merger goes through — and the new company has to spin off stations to stay under the limit in order to get Federal Communications Commission approval — then the plan is that Fox itself will buy several Tribune stations – all Fox affiliates already – but also WSFL-Channel 39, which is South Florida’s CW affiliate. Then, what would happen to programming on both stations?

WSFL

Fox TV stationsFox doesn’t own too many stations compared to other groups — even if you find 28 in 17 cities, covering more than 37 percent of American homes astounding. (But the Fox Television Stations Group’s website STILL doesn’t list them, as I’ve written time and time again.)

Of course, putting WSFL on the block goes against Sinclair trying to buy up stations in every city around the country – or just make a deal with the owners to operate them, to get around the rules. That’s because neither Sinclair nor Tribune have any other stations in Miami.

sinclair before tribune
Sinclair now, without Tribune

WSVN’s owner is Ed Ansin’s Sunbeam Television Corporation. He inherited it. In case you didn’t know, I started my TV news career there.NFL Logo

Fox has been trying to buy TV stations in NFL football cities, and Miami is one of them, but would it give up WSVN’s good ratings and help from its large news department, just to have a station of its own?

From the sixth borough, in a New York minute: YES. There is no more partnership in television. Everything is just to make a buck. Don’t forget that. It’ll repeat over and over as you read.

Look at what happened on a Saturday in January, 1987. I remember returning from the synagogue, going to my grandparents’ condo, and reading in the Miami Herald business section that NBC was buying WTVJ-Channel 4 even though WTVJ was the CBS affiliate, and WSVN was the NBC affiliate. Both networks wanted to own stations in Miami, which was growing and close to Cuba for coverage when Fidel Castro’s government collapsed. (Now, 31 years later, Fidel is dead and we’re still waiting. Typical!)

Of course, NBC didn’t want to own a CBS affiliate and CBS didn’t want its affiliate owned by NBC, but there was a two-year affiliation agreement that had just started at the beginning of the year between NBC and WSVN.

Owner Ansin fought like hell and sued to keep his NBC affiliation since he had stayed with the network during the extremely lean years before The Cosby Show put the network back on the map in 1984.

WSVN 7 logo

Of course, he hadn’t put so much emphasis on his news department since he didn’t have to. Remember, I mentioned at one point owning a TV station was a license to print money, so it wasn’t necessary.

Anyway, you would think CBS would end up affiliated with WSVN, but that’s not what happened. CBS owner Larry Tisch thought that if NBC bought WTVJ for $240 million and he can buy independent WCIX-Channel 6 for a quarter of that — just $60 million — then he got a bargain!

WCIX had its own 10pm news program but Tisch didn’t realize the importance that WCIX’s signal was 30 miles to the south of the other stations, and could not be seen in northern Dade (Miami-Dade came in the mid-1990s) or Broward counties.

In 1995, CBS lost a lot of stations to Fox. It really wanted stations. Westinghouse formed a joint venture before buying CBS, which left them with two stations in Philadelphia. The partnership kept Westinghouse’s KYW-TV, so in exchange for CBS’ WCAU, NBC gave CBS KCNC-Denver, KUTV-Salt Lake City, and also exchanged frequencies in Miami so its station would cover the entire market.

Ratings sucked for years until the two stations, WTVJ and WCIX, switched dial positions (4 to 6, and 6 to 4), and WCIX became WFOR.

Watching Channel 4 that night:

Watching Channel 6 that night:

Before then, affiliation agreements tended to be two years. I mean, how could you sign an affiliation agreement that’s longer than an FCC license to broadcast? That would be chutzpah! And if the station got in trouble and had its license revoked, then there wouldn’t even be a station affiliate partner.

Ansin held out and ended up with the new Fox network. He also had his news director Joel Cheatwood throw everything at crime-heavy local news — in which he could keep all advertising money – with younger, cheaper workers, and surprisingly it stuck, so everyone involved became a hero, the station’s style was copied everywhere and many working there departed for new, higher-paying jobs. And WSVN was temporarily taken off some hotel cable systems, so not to scare tourists!

Then look at San Francisco. NBC wanted to buy its longtime affiliate, KRON. The network really, really wanted to buy it. In 1999, the deYoung family decided to sell and NBC threatened to take away the station’s 50+ year affiliation and make the station worth hundreds of millions of dollars less, if it didn’t get to buy the station. (Can you say steal, extortion, or shakedown?) Still, KRON’s owners sold to a higher bidder, Young Broadcasting. NBC ended up making several more demands, which Young turned down, so KRON turned independent after all those years, at the end of 2001. (Young was bought by Media General, which was bought by Nexstar.)

kron

NBC pretty much invented its own Bay Area station, step by step.

KNTV 1KNTV in San Jose was an ABC affiliate that network didn’t want competing with its own San Francisco station, KGO-TV, in San Jose anymore. It agreed to take money from the Alphabet network and go out on its own — but it offered to pay NBC to affiliate with it. (Just like at the end of 2014, NBC got rid of WMGM in Atlantic City so it wouldn’t compete with its own WCAU in Philadelphia, but that station’s owners got nothing. Unfortunately, times changed.)

KNTV 2NBC had to get a new station and reverse compensation was a new, tempting concept. The FCC reclassified KNTV from a Monterey-area station able to be seen in San Jose, to an actual San Jose–San Francisco–Oakland station.

KNTV 3But the affiliation only lasted long enough for permissions given and the ink to dry. Weeks before the start of 2002, NBC bought KNTV for a fraction of KRON’s price. Finally, in 2005 and against KRON’s objections, NBC moved KNTV’s signal 52 miles closer to San Francisco, so people there could actually watch Peacock programming over the air again. (NBC apparently didn’t care about those people too much!) Now, it can’t be seen over the air in San Jose, but reread the words I just put in italics in the parenthesis.

KNTV 4Other fiascos: KNTV was over the air on Channel 11 but aired on cable channel 3 (conveniently next to KRON-Channel 4). Some genius running the transition decided to brand the station NBC3, which confused people to the east watching NBC affiliate KCRA in Sacramento, also a Channel 3. Then it became NBC11. Then simply NBC Bay Area.

See what I mean? Watch KNTV news opens through the years, from city changes to affiliate changes  to branding changes.

And Miami people, you’ll remember my former co-worker.

WHDH logo 1Now, take Boston from just last year. NBC wanted to own a station there. It insisted our old friend Ed Ansin sell his NBC affiliate WHDH-Channel 7 to them, just like it would’ve preferred back in Miami in the late 1980s. Anson refused yet again, saying NBC offered half what it was worth and trying to steal it.

(Yes, Ansin got back into business with NBC in Boston, rather than Fox, after CBS dropped WHDH, even after NBC dropped him in Miami. Why? To make money, of course!)WHDH logo 2

So in early 2016, NBC announced it would drop Ansin’s WHDH and start a new station called NBC Boston on New Year’s Day?

Where would that station be found? Nobody else was selling their station. NBC had ended up with New England Cable News, which was owned by Hearst and NBC parent company Comcast’s predecessor, until Hearst sold its share. Over the air, it already owned a weak Telemundo channel in the northern part of the market, WNEU-Channel 60 in New Hampshire. Its signal definitely wasn’t going to cover the entire Boston TV market over the public airwaves.

WHDH logo 3Ansin sued NBC again, claiming the poor people of Boston wouldn’t be able to watch NBC anymore, which kind of made him look like a monopolist. Lawmakers were also concerned, especially because if people had to buy cable to watch NBC, they would have to use Comcast which of course owns NBC! Regulations for fairness were put in place back when Comcast bought NBC Universal in 2011. For example, Comcast’s cable service couldn’t benefit from the ability of viewers to receive the network over the air, and NBC Universal programming had to be made available to any competing cable operators in town.

WHDH logo 4This is what the network did in 2016:

— NBC bumped the Telemundo signal to a WNEU sub-channel, and put NBC on the main channel.

— It bought WBTS-LD (low-powered) Channel 8 (which it couldn’t make more powerful without interfering with channel 8s in New Haven, Conn. and Portland, Maine.

— It leased a subchannel of WMFP (virtual channel 60.5) in Lawrence, Mass.

NECN Logo 2015

nbc bostonSo, by expanding NECN’s news department, it invented its own station out of nowhere!

That station, called WBTS-NBC Boston, went on the air Jan. 1, 2017. WHDH became an independent, added more news and lost some prominent people to the more prestigious NBC.

nbc10 bostonIn 2018, NBC added a channel-sharing agreement with digital Channel 44, under the license of Channel 15, a CD station meaning low power analog often with a digital companion.

It also changed the branding to NBC10, which is like repeating the San Francisco-Sacramento issue, because Providence NBC affiliate WJAR — seen on cable in Boston’s southern suburbs — is powerful on Channel 10. We’ll see how long that lasts!

So Boston got an extra station and most lost viewers since the pie had an extra piece. Was it worth it for NBC, or should it have just kept its affiliation with WHDH?

So Anton got shot down by NBC again, this time in Boston, and that could lead to several other, minor network affiliation changes. For example, in 2006, Ansin bought a second Boston station, CW affiliate WLVI, coincidentally from Tribune. (Just the signal, but not the building or workers. Everyone was laid off, maybe even the producer who beat me for an Emmy Award back in 1997!) Warner Bros. and CBS own the CW Network, and the Tribune stations were a big part of the affiliates. Since Tribune doesn’t own WLVI anymore and CBS owns former UPN independent WSBK, the CW affiliation could move there. (More on this later!)

wlvi 3

By the way, Ansin sold WLVI’s broadcast frequency in the FCC’s recent spectrum auction for an undisclosed amount that he told the Boston Globe was “a lot of money” (definitely hundreds of millions of dollars) and now that station shares WHDH’s channel.

There are several other examples:

In the mid-1990s, NBC decided to replace its Raleigh-Durham affiliate, WRDC-Channel 28, because it did poorly and didn’t carry all of NBC’s programs. That’s when The Outlet Company bought Channel 17, increased its power and changed its call letters to WNCN. Plus, there was already a relationship. Outlet owned powerful NBC affiliates in Providence (mentioned just above) and also Columbus, Ohio.

After a year, Outlet sold all three stations to NBC but that only lasted a decade. Repeat after me: It’s the money, and not what’s best for the viewer or community. In 2006, NBC sold all three stations plus its station in Birmingham to Media General. (Yes, that was NBC selling stations, the opposite of what this post is about!) The Media General time also lasted just a decade. NBC decided to affiliate with the more powerful WRAL, and WNCN soon became a CBS affiliate owned by Nexstar, after that company bought Media General.

Around the same time, NBC planned to sell its Miami station, WTVJ – weaker on Channel 6 after the dial swap – to Post-Newsweek, then the owner of ABC affiliate WPLG. That never panned out, despite both stations saying it would.

WPLG said it was going to happen:

WTVJ said it was going to happen:

Remember the rule about a company owning two of the four most powerful stations in a city.

And Fox played hardball to get a station in Charlotte, home of the NFL’s Panthers which started playing in 1995. One-time ABC affiliate WCCB-Channel 18 was one of Fox’s strongest affiliates and it had (and still has) its own news department.

Despite that, in 2013, Fox announced it was going to buy CW affiliate WJZY-Channel 46. The switch happened less than six months later. WCCB turned to the CW after 27 years with Fox. It’s now one of just three CW affiliates in the eastern time zone with its own newscasts, the others being New York and Indianapolis’ former CBS affiliate.

On the other hand, Fox’s WJZY carried 10pm newscasts from competing stations until starting its own newscasts in mid-December. The station tried experimenting but things didn’t go well, its news was ranked fifth in the time period and there was staff turnover from the top, down. Eventually, it became more traditional and a friend from Philadelphia became its news director.

So networks can create stations out of practically nothing, as we just saw Fox do.

Consider Los Angeles. The CW in there is KTLA, which is owned by Tribune and would be owned by Sinclair. There’s no reason Warner Bros. and CBS would keep the CW affiliation there when CBS has an independent station, KCAL, that could use it.

the CW

In Miami, if Fox buys WSFL, the CW affiliate now owned by Tribune could become a Fox affiliate if the network decides to drop WSVN. Then, WSFL’s CW affiliation would likely NOT go to WSVN but to WBFS, which is owned by CBS and a My Network TV affiliate, for what that’s worth. (Not much.) And that syndication service is owned by Fox!

MyNetworkTV

Would WSVN, dropped by Fox, become an affiliate of My Network TV, which is owned by Fox? Highly unlikely, I think. My Network TV doesn’t do well, Ansin would be angry, and even though he went back to NBC in Boston, My Network TV isn’t NBC.

Keep in mind, there are also examples where networks own stations but don’t put their own programs on those stations, because affiliating with competing stations makes more sense.

CBS owns Channel 44 in Tampa, but affiliates with Tegna’s Channel 10. It owns Channel 69 in Atlanta but affiliates with Meredith’s Channel 46. It owns Channel 11 in Seattle but affiliates with Cox’s Channel 7 (but it did air CBS on 11 for a few years.) It used to own Channel 34 near West Palm Beach but affiliates with Sinclair’s Channel 12.

Even in 1958, when CBS owned Channel 18 in Hartford, Conn., some viewers could watch CBS better on Boston and Providence stations, so it affiliated with Channel 3 (then WTIC-TV; now WFSB, where I went after leaving WSVN) and sold its Channel 18.

You get the picture. So who brings more to the table? WSVN can use CNN for news and not depend on Fox. Anything can happen, but you know what my money is on.

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Something on my drive home from New York, Tuesday night, told me to write this post.