Sinclair-Tribune Deal Is Huge Bet On Future Of Broadcasting

One of the enduring mysteries of our rapidly changing media age is the durability of local broadcast television compared to other local-market media such as newspapers and radio stations.

Newspapers are tanking, of course. And radio seems to be greatly diminished by the onslaught of thousands of competing sources of audio content -- from the Internet to satellite radio.

Seen in the context of these two other local legacy media, it’s puzzling why Sinclair Broadcast Group would be so eager to sink nearly $4 billion into buying Tribune Media, whose principal assets are the 42 broadcast TV stations it either owns or operates in 33 markets. 

If everything was fine with these old media, then a purchase such as this for a company such as Sinclair makes a lot of sense. This is a company with many TV stations -- the most of any single station owner -- but none in the nation’s top markets.



Buying the Tribune stations gives Sinclair this very crucial piece of the broadcast-coverage puzzle. It potentially will give the company huge clout in the advertising and programming marketplaces -- in the syndication market, of course, but perhaps more importantly, in the area of local, regional and possibly even national sports rights.

And it gives the company the kind of scale that could allow this gigantic group of TV stations to develop content of their own, including entire new networks if they feel like it.

This kind of consolidation is supposed to help a legacy medium such as local TV to better navigate the media waters. In a world such as local media where available advertising revenue is shrinking, running leaner operations is the way to go.

Among other challenges these days, local broadcasters are being buffeted by local ad spending going to digital, which has made inroads sufficient enough to be discussed in panel discussions every time broadcasters get together for a convention or industry meeting (which they do frequently).

Where capital expenditures are concerned, a large station group also has a great deal of clout in negotiating purchases of technology and equipment -- a process that is continual and expensive.

The economics of large TV station groups would indicate that with large scale comes opportunities for streamlining some operations. This sounds good on paper but in actual practice, a TV station -- whose greatest asset is its relationship with its local coverage area -- cannot really be managed effectively from afar.

In fact, much of this Sinclair deal looks good on paper for the various reasons listed above, but that’s only if one believes deeply that the local TV business will still exist or, at the very least, be recognizable in a future that is not too far away.

One would think that local television would be suffering from the same cultural trends as other legacy media -- namely, younger people who are not watching local TV news, which is the bread and butter of local television.

I have long had the impression that the people who watch local TV news are the same people who still go out and buy (or subscribe to) the local paper (if there is one).

Common sense would dictate that local TV broadcasting will potentially become musty and old-fashioned like newspapers in not very many years to come, especially if there are no younger viewers waiting in the wings to take the place of the older ones.

Or to put it another way, as media habits become increasingly focused on mobile media such as smartphones, why would anyone wait until the 10 o’clock or 11 o’clock news on a local TV station (such as Tribune’s WGN Chicago pictured above) for a weather forecast when we all have a weather app on our iPhones?

At present, the most valuable TV stations are the ones affiliated (or co-owned) with the four major networks NBC, CBS, ABC and Fox -- plus, as it happens, the Tribune group, which includes stations affiliated with all four networks and the CW.

A TV-station colossus such as the newly constituted Sinclair would have a great deal of clout in the area of negotiating affiliation agreements too, particularly at the present time when the networks are trying to get more money from affiliate stations.

So, all of this makes a great deal of sense for a broadcasting company -- except for the nagging feeling that broadcasting, as it is currently constituted, is not long for this world. What am I missing here?

3 comments about "Sinclair-Tribune Deal Is Huge Bet On Future Of Broadcasting".
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  1. Douglas Ferguson from College of Charleston, May 9, 2017 at 1:19 p.m.

    Broadcasting has more life in it, but I agree that its days have seemed numbered for a while. Sinclair is betting that number is sufficient to run a profitable business until the last Baby Boomer dies off. Maybe ATSC 3.0 will save the day.

  2. Leonard Zachary from T___n__, May 9, 2017 at 3:49 p.m.

    Cost of TV upgrade - HUGE & the FCC will not pay this time
    COST of ATSC 3.0 mobile chip - HUGE and who is goinmg to pay??
    It's an impaired technology roadmap

  3. Ed Papazian from Media Dynamics Inc, May 10, 2017 at 1:33 p.m.

    Adam, the bulk of the dollars supposedly being shifted to digital video ads are probably coming from magazine ad budgets, not "linear TV", which---in its totality, is up modestly in ad spending, not rapidly declining as some might think. Also, the 18-34s were never major local news viewers even back in the 1960s and 1970s and this allowed local independent outlets like WGN and WPIX to "counterprogram" the opposing network affils or O&Os with off-network sitcoms and action-adventure/police drama fare, which did attract younger viewers----lots of them.

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