News starting out good but going downhill fast

It’s a happy moment at CohenConnect.com.

(Online definition of moment: “a very brief period of time.” The italics are mine.)

up arrowSeptember’s blog numbers were high with more than a thousand views, despite the fact I only published four posts. (I know. I have to do better on that. And I can’t complain about the time, but each takes many hours to get – hopefully – just right!)

And near the end of the month, the blog got recognition and links on three more popular ones! Thanks to Congregation Rodeph Shalom in Philadelphia (Sept. 25); FTVLive.com’s Scott Jones (Sept. 27); and Laura Nachman (also Sept. 27).

Growing means there are stories some newer readers haven’t seen yet, and I just happen to have some follow-ups for those of you who are longtime readers.

‘A’ for Amazon from minimum wage workers

Amazon has been under fire for a lot of things, from low wages to working conditions, but the former is about to change.

This morning, the company announced it’ll pay all of its U.S. employees a minimum of $15 an hour. That includes full-time, part-time, temporary and seasonal employees. (And like all subsidiaries, Whole Foods workers.) That’s also more than double the federal minimum wage of $7.25.

Amazon claims the median salary for a full-time employee in the U.S. is $34,123, and not the $28,446 figure Sen. Bernie Sanders (I-VT) claimed when he proposed a bill that

“would impose a 100 percent tax on government benefits received by workers at companies with 500 or more employees. For example, if an Amazon employee receives $300 in food stamps, Amazon would be taxed $300.”

Amazon stressed the lower number reflects its employees’ pay worldwide, not just here.

bernie sanders jeff bezos
Sen. Bernie Sanders (I-VT), Amazon’s founder and CEO Jeff Bezos

NPR reports Amazon has more than 250,000 employees, and expects to hire 100,000 more for the coming holiday season.

Amazon’s founder and CEO Jeff Bezos said,

“We listened to our critics, thought hard about what we wanted to do, and decided we want to lead.”

Click here for details on pay and benefits from Amazon.

That’s a win for Amazon’s lowest-paid workers, but there’s a loss for Warner Wolf (not that he works at Amazon).

“Let’s go to the verdict!”

I’ve said many times I don’t want to live in Florida and that was even when I lived there. I think the Sunshine State has nothing to offer except a short time to thaw out at the beach in the winter. Oh, and low taxes and some family.

And now, legendary New York sportscaster Warner Wolf lost his age discrimination lawsuit against Don Imus precisely he lives down there! I first brought you this story back on Feb. 18.

Wolf is best known as the sportscaster who popularized the phrase “Let’s go to the videotape!”

He claimed he was fired from shock jock Don Imus’ radio show — which went off the air earlier this year — due to age discrimination.

According to yesterday’s New York Daily News,

“In a ruling released last week, Manhattan Supreme Court Justice James d’Auguste wrote that the 80-year-old Wolf’s residence in the premier state for retirees means the suit fails on jurisdictional grounds.

“‘Due to the fact that Wolf is a Florida resident that worked in Florida, he lacks any viable claims…since the impact of any alleged discriminatory conduct would have been in Florida,’ d’Auguste wrote.”

The judge also noted Imus lives in Texas and at 78, he’s in the same age category.

The Associated Press had reported Wolf’s suit claimed

“Imus once said it was time to put Wolf ‘out to pasture’ and ‘shoot him with an elephant dart gun.’”

Wolf’s firing happened in 2016, months after he moved to Naples, Fla., and contributed to the show from there.

“We tried it. It sucks,” Imus emailed shortly before Wolf’s final appearance. “If you’re in the studio in New York … it’s terrific. Anything else is not.”

But Imus himself left the Big Apple a year earlier, in 2015, to live on a ranch in the Lone Star State! The rest of the crew worked out of New York.

That included controversial sportscaster Sid Rosenberg for the show’s last year and a half.

As planned before the suit, the sun set on “Imus in the Morning” on March 29.

Wolf’s lawyer says they’ll appeal.

From radio and TV, to your computer and smartphone.

Sunday was a big day and not just for football fans. This involves every single one of you who uses the Internet.

black laptop computer keyboardLast December, the Federal Communications Commission under President Trump’s appointed chairman Ajit Pai repealed many net neutrality rules passed in 2015 during the Obama administration. Those rules prohibited internet service providers (ISPs) from slowing down or blocking content, or charging for access to certain sites. Consider it Internet freedom and equal access. You pay for a month and should be able to use it as you like.

In January, 22 state attorneys general sued, claiming the FCC’s decision was “arbitrary,” “capricious” and “an abuse of discretion.”

ajit pai jerry brown
FCC Chairman Ajit Pai (R), California Gov. Jerry Brown (D)

Finally, Sunday, California Gov. Jerry Brown (D) signed a bill to restore Obama-era open-Internet rules in the Golden State. According to Deadline, it “forbids Internet providers from blocking legal websites, intentionally slowing down Internet traffic or demanding fees for faster service.”

apple applications apps cell phone
Photo by Tracy Le Blanc on Pexels.com

But later Sunday, the Justice Department sued to prevent the law from taking effect. It argued broadband communications are interstate commerce and that’s regulated by the federal government, not the states.

The FCC wants to deregulate the industry and its repeal actually, specifically forbids states from passing their own net neutrality rules. Pai, a former Verizon lawyer (think Fios), claims net neutrality stifles investment and burdens ISPs with regulation.

The feds’ net neutrality rules are set to take effect in January for the rest of us.

angry woman
https://pixabay.com/

Unfortunately, this post isn’t ending as happily as it started.

I’ve watched and studied politics for decades, and written about it many times here. But lately, I’ve come to hate the subject. Any wonder why?

TV news anchor Howard Beale (played by Peter Finch) probably had a similar feeling in the 1976 movie Network.

We may even be at the point where he screamed,

“We know things are bad — worse than bad. They’re crazy!”

(Let me know in the comments section below.)

The line

“I’m as mad as hell and I’m not going to take this anymore!”

became so popular, it ranked number 19 on the American Film Institute’s list of the top 100 movie quotations in American cinema, released June 21, 2005, for the organization’s 100th anniversary. Network itself came in number 66 in the movie category. (The number 1 quote was Clark Gable as Rhett Butler saying

“Frankly, my dear, I don’t give a damn”

in Gone with the Wind. The number 1 movie was Citizen Kane.) Movie fans, click here for a complete look at all of the AFI’s lists.

And thanks, Todd, for having me watch this years ago. New readers will come to learn I’m not the best with movies. Last month, I finally watched another 1976 movie classic, shot right across the street.

Rocky became the highest-grossing film of the year (spawning six sequels) and went on to win three Oscars, including Best Picture. As for the AFI, it’s movie number 78, number 2 in sports after Raging Bull (click here for genres) and quote number 80.

(“Yo, Adrian!”)

And the scene there last week, if you follow me on Twitter, or just look at the feed on right side of this page (below on mobile):

Now, what you can do (rather than sticking your head out the window in the rain):

The deadline to register to vote in the Nov. 6 midterm elections – just 35 days away – is a week from today (Oct. 9) in Pennsylvania, two weeks from today (Oct. 16) in New Jersey, next Saturday (Oct. 13) in Delaware, next Friday (Oct. 12) in New York, and next Thursday (Oct. 11) in Florida (and I meant what I said). That should cover most of you. (Click here if it doesn’t.) Make sure you’re registered, learn about your candidates, and take a moment to note Tuesday, Nov. 6, on your calendar right now. (You may even get a sticker!)

Again, please leave your comments in the section below, and don’t miss out. 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. I’m also available for writing/web contract work. LinkedIn: https://www.linkedin.com/in/lennycohen

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Labor Day weekend leftovers

I don’t know, but I’m pretty sure you’ve had a busy week, between getting used to having your kids in school or planning what to do on this long holiday weekend.

Sorry for the folks in “sunny Florida” with plans ruined while dealing with Tropical Storm Gordon. (But you’re welcome for this souvenir to help you remember the occasion.)

amx_loop

I’ve been doing a lot of reading, besides taking my Google IT Support Professional Certificate class on Coursera, so I haven’t been able to share them on this blog like I should. I say “should” because they follow-up on issues I’ve raised here and you deserve a resolution to what you read here. Often, I put information on social media (my Twitter feed @feedbaylenny is on this page), or in the comments section of blog posts, but it’s only right to follow through in the format you saw it, and update the original. Unfortunately, most media don’t do so.

There may be a lot but it’ll go by quickly.

Ajit Pai fcc wikipedia
Ajit Pai (Wikipedia)

I’ll start with Federal Communications Commission Chairman Ajit Pai being cleared by his agency’s own inspector general. Reuters reported the Donald Trump appointee was under investigation to determine whether he was unfairly biased in favor of the Sinclair Broadcast Group–Tribune Media merger. Just weeks before the deal was announced, Pai raised suspicion by bringing back a rule – the UHF discount – that would’ve helped the largest U.S. television broadcast group stay within national ownership limits. But the inspector general said in his report there was

“no evidence, nor even the suggestion, of impropriety, unscrupulous behavior, favoritism toward Sinclair, or lack of impartiality related to the proposed Sinclair-Tribune merger.”

Of course, the deal never happened since the FCC eventually questioned Sinclair’s candor over necessary sale of some stations. Tribune backed out and sued Sinclair for $1 billion for alleged breach of contract. According to Reuters, Tribune said Sinclair

 “mishandled efforts to get the transaction approved by taking too long and being too aggressive in its dealings with regulators.”

feature Tribune gavel Sinclair

Now, Sinclair is countersuing.

“In Delaware Court of Chancery, Sinclair rejected Tribune’s allegations and suggested the companies had been very close to winning U.S. Department of Justice approval.”

It accused Tribune of pursuing a

“deliberate effort to exploit and capitalize on an unfavorable and unexpected reaction from the FCC to capture a windfall.” Tribune called Sinclair’s counterclaim “entirely meritless” and “an attempt to distract from its own significant legal exposure.”

Do you have access to the internet? Of course you do, since you’re reading this. (OK, maybe you’re reading a friend’s printout of this post.) Regardless, in December, the FCC under Ajit Pai repealed many net neutrality rules passed in 2015 during the Obama administration. Think of it as price up or speed down. Those internet service providers (ISPs) you love to hate, according to Variety, had been banned from

“blocking or throttling traffic, or from selling ‘fast lanes’ so websites and other types of content can gain speedier access to consumers.”

person on computer typing facebookBut luckily, denying all Americans equal access to a free and open internet got very controversial. Friday, California lawmakers passed a bill what Variety called “the strongest government-mandated protections in the country” and it’s now on Gov. Jerry Brown’s desk. Brown hasn’t said whether he’ll sign it. But the FCC ’s repeal forbids states from passing their own net neutrality rules. If Gov. Brown signs California’s bill, this could go to court. Pai, a former Verizon lawyer (think Fios), claims net neutrality stifled investment and burdened ISPs with regulation. Since June, ISPs have been able to make changes as long as they’re disclosed. So far, Reuters reports major providers have made no changes in internet access.

fcc logoHere’s more controversy from the FCC, and something I hadn’t written about before. This time, the agency is accused of lying to its watchdog, Congress, and it involves a TV comedian. More than a year ago, during the height of the net neutrality debate, the FCC claimed its “comment filing system was subjected to a cyberattack,” according to The Verge. On May 7, 2017, our old friend John Oliver, who I’ve shown on this blog several times, asked Last Week Tonight “viewers to leave pro-net neutrality comments on the commission’s ‘Restoring Internet Freedom’ proceeding.” Oliver encouraged them

“to flood the FCC’s website with the use of memorable links like gofccyourself.com and justtellmeifimrelatedtoanazi.com. That night, the FCC’s filing system crashed.”

LANGUAGE: Viewer discretion advised.

The next morning, senior officials concluded, according to emails uncovered by the inspector general, “some external folks attempted to send high traffic in an attempt to tie-up the server.” Of course, the site was shut down by a surge of valid complaints. Several people disputed the unsubstantiated fabricated traffic claim in emails, but the DDoS theory was passed on to commissioners, like Pai, who told members of Congress (Fake News Alert!) what happened that evening was “classified as a non-traditional DDoS attack.” Now, the agency’s inspector general is reporting

“there was no distributed denial of service (DDoS) attack, and this relaying of false information to Congress prompted a deeper investigation into whether senior officials at the FCC had broken the law.”

Turns out, an Oliver producer gave the FCC a “heads up” days before running the episode but it never responded, and the commission knew Oliver’s show had the power to move enough viewers to crash their system! According to that busy inspector general’s report, “We learned very quickly there was no analysis supporting the conclusion” that it was a DDoS attack. That’s when FCC officials started being investigated for allegedly breaking the law by providing false information to Congress. But the Justice Department decided not to prosecute.

We knew Facebook has been on the hot seat with Americans angry about how it handled 50 million users’ people’s data, as far back as March, but President Trump was more concerned about Amazon. Then, days later, I reported, “‘Vice President Mike Pence is concerned about Facebook and Google,’ according to a source. He argues those companies are dangerously powerful, and is worried about their influence on media coverage, as well as their control of the advertising industry and users’ personal info.” It looks like the Pence position is winning. Trump spent the week tweeting about fake news and according to Axios, attacked Google “for allegedly silencing conservative voices.”

Ars Technica reported that on Wednesday, Trump tweeted this

“video that claimed, incorrectly, that Google did not feature his first speech to Congress as president.”

(Hit the play button.)

It also reported Sen. Orrin Hatch (R-Utah) wrote a formal letter to the Federal Trade Commission, released Thursday, asking it to “reconsider the competitive effects of Google’s conduct in search and digital advertising.” But it wasn’t just Google for Trump.

Politico quoted him as saying,

“I think what Google and what others are doing, if you look at what is going on with Twitter and if you look at what’s going on in Facebook, they better be careful because you can’t do that to people. …I think that Google and Twitter and Facebook, they are really treading on very, very troubled territory and they have to be careful.”

nbc nightly news lester holtAnd as you just read, the president also claimed NBC Nightly News anchor “Lester Holt got caught fudging” his tape on Russia, but the peacock network fought back and posted the video of Trump’s extended, unedited interview with Holt last year.

No wonder he hates the media!

Of course, I won’t completely defend the news media from allegations of dumbing down and doing anything for profit in too many cases. But I’d love to see some of these disagreements fought out in open court. I don’t care who sues who. I just want the evidence presented so the truth becomes obvious to everyone.

2013-08-17 Leonard Cohen wikipedia Kings Garden Odense Denmark
Wikipedia: Cohen at King’s Garden, Odense, Denmark, Aug. 17, 2013

Also, I want to know why all Lenny Cohen searches show Leonard Cohen the musician instead of me!

As for the big tech companies, Yahoo! Finance reports,

“Wednesday morning, the Senate Intelligence Committee will question Twitter CEO Jack Dorsey and Facebook chief operating officer Sheryl Sandberg on their responses to foreign disinformation campaigns. The committee also invited Google CEO Sundar Pichai, but he declined to testify — another Google representative will testify in his place.

“Wednesday afternoon, the House Energy & Commerce Committee will quiz Dorsey on Twitter’s ‘algorithms and content monitoring.’”

NBC News has reported Facebook CEO Mark Zuckerberg announced changes to the platform’s news feed product since the data issue March, with “more posts from friends and family” and “less public content, including videos and other posts from publishers or businesses.” Now, NBC continues,

“The goal was to make Facebook more social with fewer commercial and product posts. Publishers ranging from big businesses to mommy bloggers are forced to post more content that they create personally, rather than sharing products or affiliate links.

“With these changes, some small publishers claim to see a massive downside.”

What I want to know is why in July, Zuckerberg decided Facebook would not ban Holocaust deniers! Fortune reported,

“Zuckerberg, who is Jewish, said he found Holocaust deniers ‘deeply offensive.’ Then he said, ‘but at the end of the day, I don’t believe that our platform should take that down because I think there are things that different people get wrong—I don’t think that they’re intentionally getting it wrong. It’s hard to impugn intent and to understand the intent.’”

So Holocaust deniers are simply uninformed? Are you kidding me, Mark? I would’ve hoped Sandberg, who grew up in North Miami Beach, whose brother David was my high school class valedictorian, would’ve set him straight. The Times of Israel reports Sandberg “said in an interview last year that, as a tech company, Facebook hires engineers — not reporters and journalists.” Personally, I find this would be one fight losing my job over. There has to be a line somewhere. Go far enough and you’re “just following orders” and we know what made that phrase so well known.

Zuckerberg later clarified in an email,

“I personally find Holocaust denial deeply offensive, and I absolutely didn’t intend to defend the intent of people who deny that.” Then, he “reiterated a distinction he tried to draw in the interview: Posts that advocate violence will be taken down, but those that peddle misinformation will stay but ‘would lose the vast majority of its distribution in News Feed.’”

Sounds like he has lost the vast majority of his mind!

Also coming up this shortened Labor Day week, Morning Brew reports Sen. Bernie Sanders (I-Vt.) will “introduce a bill requiring major employers—like Amazon, Walmart, and McDonald’s—to cover the cost of government assistance programs its workers rely on…programs like food stamps, public housing, Medicaid, and more.” For years, there has been criticism years about the way Amazon pays and treats workers at its warehouses. According to The Washington Post, the Democratic Socialist said his goal

“is to force corporations to pay a living wage and curb about $150 billion in taxpayer dollars that go to funding federal assistance programs for low-wage workers each year. The bill … would impose a 100 percent tax on government benefits received by workers at companies with 500 or more employees. For example, if an Amazon employee receives $300 in food stamps, Amazon would be taxed $300.”

Keep in mind, Amazon owner Jeff Bezos (another who spent years in Miami) also owns The Washington Post!

Two last things: The cemetery near Detroit finally fixed my grandfather’s grave. In June, it took hours to find the marker since it was buried under inches of dirt. Now, it has been raised and leveled.

oakview cemetery

bar mitzvah shirt

And this weekend is the 3?th anniversary of my bar mitzvah. The party had an animal theme, of course, and all the kids got t-shirts like this. (Yes, I’m keeping the specific year as evergreen as the narrator says on that Philadelphia show The Goldbergs on purpose, even though there are readers who were there!)

So that’s about it. All the original pages I found have been updated.

Before I go, I also have to thank every one of you for more than 16,800 page views on this site! The numbers have risen exponentially recently, and I wonder why. Please let me know if there’s anything I should be doing more here.

Leave your comments in the section below, and don’t miss out. 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. I’m also available for writing/web contract work.

Tribune to Sinclair: Judge’s gavel instead of merger’s handshake

It’s a great day in broadcasting, or as great as things can get in this day and age. There will be no merger between Sinclair Broadcast Group and Tribune Media.

Today, according to Axios, Tribune announced it

“terminated its $3.9 billion merger agreement with Sinclair Broadcasting and that it has filed a lawsuit for breach of contract.”

— UPDATE: Sinclair counter-suing Tribune, accusing its onetime takeover target of a “deliberate effort to exploit and capitalize on an unfavorable and unexpected reaction from the FCC to capture a windfall.” —

Tribune sued in Delaware Chancery Court. It’s asking for “approximately $1 billion of lost premium to Tribune’s stockholders and additional damages in an amount to be proven at trial,” according to TVNewsCheck.

The Wall Street Journal reported Tribune alleges Sinclair “failed to make sufficient efforts to get their $3.9 billion deal approved by regulators.”

The first sign of trouble from the Federal Communications Commission, other than delays, came last month. It was a surprise, considering how the FCC greased the wheels for the takeover, whether on purpose or not. (That’s under investigation.)

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

TVNewsCheck continued,

“Tribune claimed that Sinclair used ‘unnecessarily aggressive and protracted negotiations’ with the Department of Justice and the FCC over regulatory requirements and that it refused to sell the stations it needed to in order for regulatory approval.”

In the filing, Tribune said:

“Beginning in November 2017, DOJ repeatedly told Sinclair that it would clear the merger if Sinclair simply agreed to sell stations in the 10 markets the parties had identified in the merger agreement. DOJ’s message to Sinclair could not have been clearer: if Sinclair agreed to sales in those 10 markets, ‘We would be done.’”

That’s what happens when you get into business with a company like Sinclair. I’ve written plenty about it and its top officials, including those who inherited the company.

Personally, it proves what I wrote here on July 25,

“Even better, it looks like one of the seven deadly sins – greediness – may have killed the deal!”

The deal, while complex and controversial, should not have been a problem.

The biggest hurdle was supposed to be national ownership rules, but ironically, the FCC took care of that just weeks before the deal’s May 2017 announcement.

Bloomberg reported,

“Broadcasters may own stations that reach 39 percent of U.S. households – but how that audience is measured has been in dispute. Last year, the FCC’s Republican majority reinstated a measure that treats ultra-high-frequency or UHF band stations as counting for just half of their lower-frequency counterparts, enabling broadcasters to own more stations and enjoy greater reach.”

Democrats had gotten rid of the so-called UHF discount the year before, since it started way back at a time when there where major reception differences between VHF and UHF stations on your television dial.

“FCC Chairman Ajit Pai, a Republican appointed by President Donald Trump,” is even under investigation by his own agency’s inspector general because of the timing of the reinstatement and whether it was done for Sinclair.

But still, the deal would’ve been so big that some stations would have to go, and that’s what led to problems. Specifically, it was which stations the combined Sinclair-Tribune would own, would have to go.

Sinclair and Tribune are two of the country’s largest broadcasters.

Sinclair, the largest, claims it “owns, operates and/or provides services to 191 television stations in 89 markets.”

According to TVSpy,

“Sinclair was proposing to control 233 stations in 108 markets, adding 42 Tribune stations to their current roster.”

sinclair before tribune
Sinclair’s reach, without Tribune

That would’ve included the nation’s biggest TV markets where Sinclair has no presence, like New York, Los Angeles, Chicago and Philadelphia.

But there was a lot of pushback from public interest groups fighting for smaller companies and localism, and against micromanaging the largest group of stations in the country.

Boris Epshteyn clip art

They were joined by Democrats concerned Sinclair would give even more stations its conservative bent. Sinclair requires so-called must-runs, including airing commentaries by one of President Trump’s former communications spokespersons, Boris Epshteyn. The company also forced anchors at their stations to read a message that parroted President Trump’s talking points about the media.

jared kushnerAnd President Trump’s son-in-law and advisor Jared Kushner said Sinclair executives worked with the campaign to spread pro-Trump messages in Sinclair newscasts when he was running against Hillary Clinton, which Sinclair vehemently denied.

Plus, conservative media outlets were afraid Sinclair would get in the game and interfere with their efforts to compete with Fox News. And all the time passing didn’t help Sinclair’s case.

Meanwhile, Sinclair defended the merger as necessary consolidation in the face of competition from cable and tech, according to NBC News.

The network also reported it came “in the face of opposition from the FCC and questions about whether Sinclair tried to mislead the government with its divestiture plan, in which it sought to sell some stations to parties close to Sinclair.” (I’ve written about these so-called sidecar agreements time and time again.)

The first sign of trouble, other than delays, came last month.

TVNewsCheck wrote Pai, perhaps the deal’s biggest cheerleader after President Trump, decided he had “serious concerns” about the Tribune stations Sinclair would get in Chicago, Dallas and Houston – that Sinclair might still be able to operate them “in practice, even if not in name.”

WGN-TV

TVSpy put it this way:

“Pai suggested Sinclair would sell but still operate those stations, which is illegal. The FCC then sent the deal for review by an administrative law judge.”

Sinclair has been known to use shell corporations, local marketing agreements and joint sales agreements to operate stations it doesn’t own. (See Cunningham Broadcasting, for example. Click here for Baltimore and here for mid-Michigan.)

There were also concerns about spinning off stations for unreasonably low prices.

Tribune’s complaint alleges

“Sinclair’s material breaches were willful breaches of the merger agreement, because they were deliberate acts and deliberate failures to act that were taken with the actual knowledge that they would or would reasonably be expected to result in or constitute a material breach.

“As a result of Sinclair’s breaches, Tribune has sustained financial harm and has lost the expected benefits of the merger agreement.”

As I wrote here on July 27, “Tribune can leave Sinclair at the alter/chuppah on Aug. 8.” That was yesterday.

This morning, Tribune released this statement:

“Tribune Media Company today announced that it has terminated its merger agreement (the ‘Merger Agreement’) with Sinclair Broadcast Group, Inc. (‘Sinclair’), and that it has filed a lawsuit in the Delaware Chancery Court against Sinclair for breach of contract. The lawsuit seeks compensation for all losses incurred as a result of Sinclair’s material breaches of the Merger Agreement.

“In the Merger Agreement, Sinclair committed to use its reasonable best efforts to obtain regulatory approval as promptly as possible, including agreeing in advance to divest stations in certain markets as necessary or advisable for regulatory approval. Instead, in an effort to maintain control over stations it was obligated to sell, Sinclair engaged in unnecessarily aggressive and protracted negotiations with the Department of Justice and the Federal Communications Commission (the ‘FCC’) over regulatory requirements, refused to sell stations in the markets as required to obtain approval, and proposed aggressive divestment structures and related-party sales that were either rejected outright or posed a high risk of rejection and delay—all in derogation of Sinclair’s contractual obligations. Ultimately, the FCC concluded unanimously that Sinclair may have misrepresented or omitted material facts in its applications in order to circumvent the FCC’s ownership rules and, accordingly, put the merger on indefinite hold while an administrative law judge determines whether Sinclair misled the FCC or acted with a lack of candor. As elaborated in the complaint we filed earlier today, Sinclair’s entire course of conduct has been in blatant violation of the Merger Agreement and, but for Sinclair’s actions, the transaction could have closed long ago. (I highlighted that last sentence. —Lenny)

“‘In light of the FCC’s unanimous decision, referring the issue of Sinclair’s conduct for a hearing before an administrative law judge, our merger cannot be completed within an acceptable timeframe, if ever,’” said Peter Kern, Tribune Media’s Chief Executive Officer. ‘This uncertainty and delay would be detrimental to our company and our shareholders. Accordingly, we have exercised our right to terminate the Merger Agreement, and, by way of our lawsuit, intend to hold Sinclair accountable.’”

(Tribune’s statement continued with earnings information and then returned to the Sinclair situation. See that at the bottom of this post, along with its CEO’s memo to employees.)

That’s a big change from exactly three weeks ago, July 19, when Tribune responded to the FCC issuing its Hearing Designation Order with this statement:

“Tribune Media has now had the opportunity to review the FCC’s troubling Hearing Designation Order.  We are currently evaluating its implications and assessing all of our options in light of today’s developments.

“We will be greatly disappointed if the transaction cannot be completed, but will rededicate our efforts to running our businesses and optimizing assets.  Thanks to the great work of our employees, we are having a strong year despite the significant distraction caused by our work on the transaction and, thus, are well-positioned to continue maximizing value for our shareholders going forward.”

Click here for the 62-page complaint.

In case you don’t plan to read it all, The Washington Post reported Tribune accused Sinclair of

“engaging in ‘belligerent and unnecessarily protracted negotiations’ with the FCC as well as the Justice Department.” Also, it argued “in its lawsuit that Sinclair had been ‘confrontational with and belittling of DOJ staff.’ During negotiations, for example, Sinclair’s general counsel, Barry Faber, challenged the Justice Department’s top antitrust official, Makan Delrahim, telling him at one point, ‘sue me,’ Tribune alleged. In another meeting, Faber accused Delrahim of ‘misunderstand[ing] the industry,’ the suit said.”

Also new, The Post reported Tribune alleged it threatened to sue Sinclair in February if it didn’t divest stations to secure the DOJ’s support, prompting Sinclair to revise its offer.

Click here for 176 pages of exhibits.

Sinclair, for its part, put out this response:

“Sinclair Broadcast Group, Inc. announced today that it received a termination notice of its Merger Agreement from Tribune Media Company. In response, the Company subsequently has withdrawn with prejudice its FCC applications to acquire Tribune and filed with the Administrative Law Judge a notice of withdrawal of the applications and motion to terminate the hearing.” ‘’

“‘We are extremely disappointed that after 15 months of trying to close the Tribune transaction, we are instead announcing its termination,’ commented Chris Ripley, President & Chief Executive Officer. ‘We unequivocally stand by our position that we did not mislead the FCC with respect to the transaction or act in any way other than with complete candor and transparency. As Tribune, however commented, in their belief, the FCC’s recent designation of the deal for a hearing in front of an Administrative Law Judge would have resulted in a potentially long and burdensome process and, therefore, pursuing the transaction was not in the best interest of their company and shareholders. As for Tribune’s lawsuit, we fully complied with our obligations under the merger agreement and tirelessly worked to close this transaction. The lawsuit described in Tribune’s public filings today is entirely without merit, and we intend to defend against it vigorously.

“‘Nonetheless, we wish to thank both our and Tribune’s employees and our many advisers who have committed a tremendous amount of time and effort over the past 15 months towards the acquisition of Tribune. It is unfortunate that those efforts have not been realized. The combined company would have benefited the entire broadcast industry and the public through the advancement of ATSC 3.0, increased local news and enhanced programming.’”

FTVLive’s Scott Jones brought more from Ripley.

Chris Ripley statement

Despite Sinclair stock starting lower today, the company announced it’s buying back up to $1 billion of its Class A common shares.

“We strongly believe in the long term outlook of our company and disagree with the market’s current discounted view on our share price,” Ripley said. “The $1 billion authorization does not use our future free cash flow generation, but simply the excess cash currently on our balance sheet.”

Sinclair stock ended the day 2.58 percent higher, but fell in after-hours trading.

The FCC did not comment today.

The Sinclair-Tribune deal would’ve led to several others. Stations that put the combination above the legal ownership limit were supposed to be spun off to several different companies. Now they won’t.

One of those companies is 21st Century Fox, which The Hollywood Reporter described as partially merging with Disney/ABC. Disney still plans to buy “the Fox film and TV studio, Nat Geo, FX Networks, Star India, 39 percent of Sky and 30 percent of Hulu … along with 22 regional sports networks (RSNs).”

Disney is selling those regional sports networks because the Justice Department was worried they “coupled with ESPN would create a sports monopoly.”

Yahoo! Finance reports Disney will have 90 days from the deal closing to sell, and CEO Bob Iger said on Tuesday’s earnings call,

“The RSNs will be sold, and the process of selling them is actually already beginning. Conversations are starting, interest is being expressed. And it’s likely that we’ll negotiate a deal to sell them but the deal will not be fully executed or close until after the overall deal for 21st Century Fox closes.”

It added, Iger said Disney “assumed the responsibility of divestiture” in December 2017 when it first made an offer to Fox, “if the regulatory process demanded that we do that.”

There was never a possibility Fox would keep the networks or buy them back.

Yahoo! suggests potential buyers are Comcast, which has its own RSNs and lost the bidding war for Fox’s assets; Discovery Communications; AT&T, owner of DirecTV and now also Time Warner, but the Justice Department is appealing that; Verizon, owner of Fios; and another cable company, Charter Communications.

So Fox will be left with “the Fox broadcast network, FS1, FS2, Fox Business Network and the Fox News Channel, which, collectively, is known for now as New Fox,” according to The Hollywood Reporter.

It planned to buy some of those stations that had to be spun off from the Sinclair-Tribune deal, probably insisting on the number and places (NFL football markets), or threatening to pull the stations’ affiliations and put Fox programming on a competitor.

“Live sports is clearly the most valuable content in our industry,” executive chairman Lachlan Murdoch said during a conference call, yesterday. His company is now paying a fortune for rights to Thursday Night Football.

Thursday Night Football logo

But now, with no merger, the station sales to Fox and others are in jeopardy, and decisions whether to sell or not return to Sinclair and Tribune.

However, new deals may already be in the works. Just Monday, Tribune announced it

“reached a comprehensive agreement with Fox Broadcasting Company to renew the existing Fox affiliations of eight Tribune Media television stations, including KCPQ-TV (Seattle), KDVR-TV (Denver), WJW-TV (Cleveland), KTVI-TV (St. Louis), WDAF-TV (Kansas City), KSTU-TV (Salt Lake City), WITI-TV (Milwaukee), WGHP-TV (Greensboro, NC). Terms of the agreement were not disclosed.”

So we can expect those stations to keep airing Fox programming unless there’s something in the “terms of the agreement” that mentions the merger not happening.

On top of that, last week, FTVLive’s Scott Jones reported, “Fox is very interested in a number of the Tribune stations” – still – and, “the suits from Fox have been spotted inside (those) Tribune stations looking around” as if to buy. So we’ll see if it ends up with more Tribune stations than it was expected to buy under the deal.

Fox WSFL WSVN

Not mentioned is Miami/Fort Lauderdale Tribune station WSFL. That CW affiliate was going to be sold to Fox, even though Fox has an affiliation agreement with Sunbeam’s WSVN in South Florida. What would’ve happened if Fox bought a competitor was anyone’s guess, but that’s now a moot point.

Of course, the big question is whether Tribune will still sell at all. TVNewsCheck’s Harry Jessell reported Tribune CEO Peter Kern cast some doubt on that today, telling analysts the company may want to “enhance” its TV station portfolio.

cox media group

We know Cox Media Group is exploring selling. Others will if the price is right, and prices should rise if there are fewer, bigger companies in the business – especially if they’re allowed to buy more after the FCC takes another look at raising ownership caps.

Despite uncertainty, there’s probably a lot of relief at Tribune stations they won’t have bosses from Sinclair.

TVNewsCheck’s Harry Jessell – who I quote a lot – recently wrote

“how Sinclair’s aggressive approach in its dealing with the Justice Department and the FCC with regard to its merger with Tribune has been polluting the best regulatory atmosphere in Washington since the Reagan administration.”

Jessell ended his column by writing,

“So, let’s recap. Sinclair’s attempt to win regulatory approval of its Tribune merger has so far severely damaged Sinclair’s standing at the FCC, aggravated the most broadcast-friendly FCC chairman in decades, subjected its own and several other broadcast groups’ basic business dealings to intense Justice Department scrutiny and exposed those same groups to (an antitrust) lawsuit that, no matter how frivolous, needs to be answered.”

As promised earlier, this is the rest of today’s Tribune statement:

RECENT DEVELOPMENTS

Sinclair Acquisition

On May 8, 2017, the Company entered into the Merger Agreement with Sinclair, providing for the acquisition by Sinclair of all of the outstanding shares of the Company’s Class A common stock and Class B common stock by means of a merger of Samson Merger Sub Inc., a wholly owned subsidiary of Sinclair, with and into Tribune Media Company (the “Merger”), with the Company surviving the Merger as a wholly owned subsidiary of Sinclair.

In the Merger, each share of the Company’s common stock would have been converted into the right to receive (i) $35.00 in cash, without interest and less any required withholding taxes, and (ii) 0.2300 of a share of Class A common stock of Sinclair.

The consummation of the Merger was subject to the satisfaction or waiver of certain important conditions, including, among others: (i) the approval of the Merger by the Company’s stockholders, (ii) the receipt of approval from the FCC and the expiration or termination of the waiting period applicable to the Merger under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”) and (iii) the effectiveness of a registration statement on Form S-4 registering the Sinclair Common Stock to be issued in connection with the Merger and no stop order or proceedings seeking the same having been initiated by the Securities and Exchange Commission (the “SEC”).

Pursuant to Section 7.1(e) of the Merger Agreement, Sinclair was “entitled to direct, in consultation with the Company, the timing for making, and approve (such approval not to be unreasonably withheld) the content of, any filings with or presentations or submissions to any Governmental Authority relating to this Agreement or the transactions contemplated hereby and to take the lead in the scheduling of, and strategic planning for, any meetings with, and the conducting of negotiations with, Governmental Authorities relating to this Agreement or the transactions contemplated hereby.” Applications to regulatory authorities made jointly by Sinclair and Tribune in connection with the Merger were made at the direction of Sinclair pursuant to its authority under this provision of the Merger Agreement.

On September 6, 2017, Sinclair’s registration statement on Form S-4 registering the Sinclair Common Stock to be issued in the Merger was declared effective by the SEC.

On October 19, 2017, holders of a majority of the outstanding shares of the Company’s Class A Common Stock and Class B Common Stock, voting as a single class, voted on and approved the Merger Agreement and the transactions contemplated by the Merger Agreement at a duly called special meeting of Tribune Media Company shareholders.

The applications seeking FCC approval of the transactions contemplated by the Merger Agreement (the “Applications”) were filed on June 26, 2017, and the FCC issued a public notice of the filing of the Applications and established a comment cycle on July 6, 2017. Several petitions to deny the Applications, and numerous other comments, both opposing and supporting the transaction, were filed in response to the public notice. Sinclair and the Company jointly filed an opposition to the petitions to deny on August 22, 2017 (the “Joint Opposition”). Petitioners and others filed replies to the Joint Opposition on August 29, 2017. On September 14, 2017, the FCC’s Media Bureau issued a Request for Information (“RFI”) seeking additional information regarding certain matters discussed in the Applications. Sinclair submitted a response to the RFI on October 5, 2017. On October 18, 2017, the FCC’s Media Bureau issued a public notice pausing the FCC’s 180-day transaction review “shot-clock” for 15 days to afford interested parties an opportunity to comment on the response to the RFI. On January 11, 2018, the FCC’s Media Bureau issued a public notice pausing the FCC’s shot-clock as of January 4, 2018 until Sinclair has filed amendments to the Applications along with divestiture applications and the FCC staff has had an opportunity to review any such submissions. On February 20, 2018, the parties filed an amendment to the Applications (the “February 20 Amendment”) that, among other things, (1) requested authority under the FCC’s “Local Television Multiple Ownership Rule” (the “Duopoly Rule”) for Sinclair to own two top four rated stations in each of three television markets (the “Top-4 Requests”) and (2) identified stations (the “Divestiture Stations”) in 11 television markets that Sinclair proposed to divest in order for the Merger to comply with the Duopoly Rule and the National Television Multiple Ownership Rule. Concurrently, Sinclair filed applications (the “Divestiture Trust Applications”) proposing to place certain of the Divestiture Stations in an FCC-approved divestiture trust, if and as necessary, in order to facilitate the orderly divestiture of those stations following the consummation of the Merger. On February 27, 2018, in furtherance of certain undertakings made in the Applications and the February 20 Amendment, the parties filed separate applications seeking FCC approval of the sale of Tribune’s stations WPIX-TV, New York, New York, and WGN-TV, Chicago, Illinois, to third-party purchasers. On March 6, 2018, the parties filed an amendment to the Applications that, among other things, eliminated one of the Top-4 Requests and modified the remaining two Top-4 Requests. Also on March 6, 2018, the parties modified certain of the Divestiture Trust Applications. On April 24, 2018, the parties jointly filed (1) an amendment to the Applications (the “April 24 Amendment”) that superseded all prior amendments and, among other things, updated the pending Top-4 Requests and provided additional information regarding station divestitures proposed to be made by Sinclair in 15 television markets in order to comply with the Duopoly Rule or the National Television Multiple Ownership Rule, (2) a letter withdrawing the Divestiture Trust Applications and (3) a letter withdrawing the application for approval of the sale of WPIX-TV to a third-party purchaser. In order to facilitate certain of the compliance divestitures described in the April 24 Amendment, between April 24, 2018 and April 30, 2018, Sinclair filed applications seeking FCC consent to the assignment of license or transfer of control of certain stations in 11 television markets.

On May 8, 2018, the Company, Sinclair Television Group, Inc. (“Sinclair Television”) and Fox Television Stations, LLC (“Fox”) entered into an asset purchase agreement (the “Fox Purchase Agreement”) to sell the assets of seven network affiliates of Tribune for $910.0 million in cash, subject to post-closing adjustments. The network affiliates subject to the Fox Purchase Agreement are: KCPQ (Tacoma, WA); KDVR (Denver, CO); KSTU (Salt Lake City, UT); KSWB-TV (San Diego, CA); KTXL (Sacramento, CA); WJW (Cleveland, OH); and WSFL-TV (Miami, FL). The closing of the sale pursuant to the Fox Purchase Agreement (the “Closing”) was subject to approval of the FCC and clearance under the HSR Act, as well as the satisfaction or waiver of all conditions of the consummation of the Merger, which was scheduled to occur immediately following the Closing.

On May 14, 2018, Sinclair and Tribune filed applications for FCC approval of additional station divestitures to Fox pursuant to the Fox Purchase Agreement. On May 21, 2018, the FCC issued a consolidated public notice accepting the divestiture applications filed between April 24, 2018 and May 14, 2018, for filing and seeking comment on those applications and on the April 24 Amendment, and establishing a comment cycle ending on July 12, 2018.

On July 16, 2018, the Chairman of the FCC issued a statement that he had “serious concerns about the Sinclair/Tribune transaction” because of evidence suggesting “that certain station divestitures that have been proposed to the FCC would allow Sinclair to control [the divested] stations in practice, even if not in name, in violation of the law,” and that he had circulated to the other Commissioners “a draft order that would designate issues involving certain proposed divestitures for a hearing in front of an administrative law judge.”

On July 18, 2018, at the direction of Sinclair pursuant to its authority under the Merger Agreement, Sinclair and Tribune jointly filed an amendment to the Applications reflecting that the applications for divestiture of WGN-TV (Chicago), KDAF (Dallas), and KIAH (Houston) filed in connection with the April 24 Amendment were being withdrawn, that WGN-TV would not be divested, and that KDAF and KIAH would be placed in a divestiture trust pending sales to one or more new third parties. The applications for divestiture of WGN-TV, KDAF and KIAH were withdrawn by concurrent letter filings. On July 19, 2018, the FCC released a Hearing Designation Order (“HDO”) referring the Applications to an FCC Administrative Law Judge (“ALJ”) for an evidentiary hearing to resolve what the FCC concluded are “substantial and material questions of fact” regarding (1) whether Sinclair was the real party-in-interest to the divestiture applications for WGN-TV, KDAF, and KIAH, and, if so, whether Sinclair engaged in misrepresentation and/or lack of candor in its applications with the FCC; (2) whether consummation of the merger would violate the FCC’s broadcast ownership rules; (3) whether grant of the Applications would serve the public interest, convenience, and/or necessity; and (4) whether the Applications should be granted or denied. The HDO designated as parties to the proceeding the FCC’s Enforcement Bureau and persons who had filed formal petitions to deny the Applications, and directed the ALJ to establish a procedural schedule by Friday, August 24, 2018.

On August 2, 2017, the Company received a request for additional information and documentary material, often referred to as a “second request”, from the United States Department of Justice (the “DOJ”) in connection with the Merger Agreement. The second request was issued under the HSR Act. Sinclair received a substantively identical request for additional information and documentary material from the DOJ in connection with the transactions contemplated by the Merger Agreement. The parties entered into an agreement with the DOJ on September 15, 2017 by which they agreed not to consummate the Merger Agreement before certain dates related to their certification of substantial compliance with the second request (which occurred in November 2017) and to provide the DOJ with 10 calendar days’ notice prior to consummating the Merger Agreement. Although Sinclair and DOJ reached agreement on a term sheet identifying the markets in which stations would have to be divested, they did not reach a definitive settlement and their discussions on significant provisions remained ongoing as of August 2018.

Pursuant to the Merger Agreement, the Company had the right to terminate the Merger Agreement if Sinclair failed to perform in all material respects its covenants, and such failure was not cured by the end date of August 8, 2018. Additionally, either party may terminate the Merger Agreement if the Merger is not consummated on or before August 8, 2018 (and the failure for the Merger to have been consummated by such date was not primarily due to a breach of the Merger Agreement by the party terminating the Merger Agreement). On August 9, 2018, the Company provided notification to Sinclair that it had terminated the Merger Agreement, effective immediately, on the basis of Sinclair’s willful and material breaches of its covenants and the expiration of the second end date thereunder. In connection with the termination of the Merger Agreement, on August 9, 2018, the Company provided notification to Fox that it has terminated the Fox Purchase Agreement, effective immediately. Under the terms of each of the Merger Agreement and the Fox Purchase Agreement, no termination fees are payable by any party.

On August 9, 2018, the Company filed a complaint in the Chancery Court of the State of Delaware against Sinclair, alleging breach of contract under the Merger Agreement. The complaint alleges that Sinclair willfully and materially breached its obligations under the Merger Agreement to use its reasonable best efforts to promptly obtain regulatory approval of the Merger so as to enable the Merger to close as soon as reasonably practicable. The lawsuit seeks damages for all losses incurred as a result of Sinclair’s breach of contract under the Merger Agreement.

This is Tribune CEO Kern’s memo to employees, thanks again to FTVLive’s Scott Jones:

Tribune Team,

Earlier this morning we announced the termination of our proposed merger with Sinclair and that we have filed a lawsuit against Sinclair for breach of contract—attached (above —Lenny) is the press release we issued a short time ago.

Given the developments of the last few weeks, and the decision by the Federal Communications Commission to refer certain issues to an administrative law judge in light of Sinclair’s conduct, it’s highly unlikely that this transaction could ever receive FCC approval and be completed, and certainly not within an acceptable timeframe. This delay and uncertainty would be detrimental to our company, to our business partners, to our employees and to our shareholders. Accordingly, our Board made the decision to terminate the merger agreement with Sinclair to enable us to refocus on our many opportunities to drive the company forward and enhance shareholder value.

As for the lawsuit, we are confident that Sinclair did not live up to its obligations under the merger agreement and we intend to hold them accountable. A suit like this does not get resolved overnight and it is the last thing you should be thinking about, but I want you to know that Tribune did everything it was supposed to do, and we will make sure we are treated fairly.

Right now, I am sure many of you are still absorbing the news and wondering what it means for our company, for our future, and most especially for each of you. I want to take a moment to answer these questions and address some of your concerns as we now re-adjust to the old normal of running our great and storied Tribune Media Company.

So, let’s begin there—Tribune Media remains as strong as ever, with great TV stations, important local news and sports programming, a re-energized and financially powerful cable network, and a terrific history of serving our viewers, our advertisers, and our MVPD and network partners. You need look no further than the exceptional financial results we released today for proof of that. Our consistent success is directly related to your talent, your experience, your innovation, and your willingness to give your best every day.

As for the future, we continue to live in complex times in the media world. New consumer habits, new entrants to the space, new competitors every day, and consolidation going on all around us. Rapid change has become the norm—it’s impossible to predict the next big thing. What I do know, though, is that we’ve got valuable assets, great people running them, and we remain one of the preeminent broadcasting companies in America.

No doubt the rumor mill will begin anew with speculation about who might buy us or who we might buy or whether the regulatory landscape still favors consolidation. We can’t do anything about such speculation. What we can do is rededicate ourselves to our own performance. Let’s shake off the cobwebs of deal distraction, ignore the outside noise, and continue delivering on our commitment to each other, to our customers, to our partners and to the communities we serve. If we do that, the rest will take care of itself.

Let’s get together for a companywide town hall meeting tomorrow at Noon ET. We’ll broadcast the meeting live to our business units, talk more about all these issues and take your questions—you can submit questions in advance of the meeting to: questions@tribunemedia.com.  In the meantime, if you have any concerns, our HR team is ready to help; and Gary Weitman can handle any media inquiries you might get.

Thank you, again,
Peter

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