The American Civil Liberties Union has urged the FCC to deny Sinclair Broadcasting’s proposed merger with Tribune Media, in part defending smaller cable operators against potential harms from the deal.
In comments filed Tuesday with the FCC, the ACLU attacked the transaction from numerous angles, arguing that it would stifle viewpoint diversity and competition, and taking aim at Sinclair’s reliance on the recently reinstated UHF discount to skirt media ownership limits.
The ACLU also pointed to harms facing smaller cable stations, asserting that not only would the merger enable Sinclair to push smaller broadcasters, especially in rural areas, out of business, it would also give the broadcast giant too much power during retransmission negotiations.
“With such consolidated ownership, Sinclair will step up its ‘take it or leave it’ retransmission offers to small cable stations, which will result in higher prices passed on to consumers and a crowding out of stations that do not or cannot afford to submit to strong-arm negotiating tactic,” ACLU wrote in the filing.
“Consumers of these small cable stations will also be more likely to experience blackouts. This process will disproportionately harm rural consumers, many of whom rely exclusively on small cable stations for their television broadcasting,” the group added.
The American Cable Association, the industry group that represents smaller cable operators, on Wednesday echoed its own disapproval of the $3.9 billion Sinclair-Tribune deal. In a petition to deny filed with the FCC, the ACA contends Sinclair and Tribune failed to meet their public interest obligations and the agency should reject the transaction.
“ACA remains deeply concerned that the Sinclair-Tribune TV station transaction, including the terms of attendant divestitures to Fox and other TV station owners, is contrary to the public interest and should be denied,” ACA CEO Matthew Polka said in a statement. “First, Sinclair-Tribune have not even attempted to show that their proposed divestitures serve the public interest. Second, to the extent the FCC permits divestitures of Tribune Stations, to occur ‘immediately after closing,’ it should require Sinclair and any purchasers to agree that Sinclair does not ‘acquire’ or ‘obtain control of’ the Tribune stations to be divested. What’s this about? It is a necessary clarification because Sinclair’s retransmission consent agreements with ACA members contain ‘after-acquired-station clauses,’ which automatically raise retransmission consent fees for any station that Sinclair acquires. Without such a clarification, the purchasers of former Tribune stations divested by Sinclair might attempt to raise prices under these after-acquired-station clauses, thereby undermining the purposes of the divestiture.”
ACA previously argued that Sinclair’s most recent May amendment to the proposed deal was too light on details regarding planned station divestitures.
Initial comments were due June 20, but filers have until July 5 for opposing comments and July 12 for replies to those comments.