Commentary

Will Sinclair's Purchase Of Tribune Cause More Blackouts?

by Wayne Friedman , Staff Writer, April 23, 2018

Don’t worry about ever bigger and more powerful TV stations groups dangling potential retransmission agreements with pay TV providers and causing blackouts.

It won’t happen, according to Sinclair Broadcast Group. But prices for consumers could still climb.

Sinclair wants to allay worries -- brought by pay TV providers -- that if it get final approval to buy Tribune Media and become a bigger TV station force, its new leverage won’t result in more blackouts from TV stations. As evidence of this, Sinclair says in 2015-16, 17 blackouts involving Dish were with 17 different station owners.

Maybe Sinclair could put this blackout assurance stuff in writing?

A completed Sinclair deal to buy Tribune would give it enough stations to cover 70% of U.S TV homes. Current federal rules for station groups are capped at 39%. Thus, Sinclair would need some changes from the FCC.

Here’s the kicker: Even if eliminating the cap would result in an increase retrans fees -- and, in turn, higher prices for consumers -- Sinclair says this wouldn’t necessarily be anti-consumer. Because those fees would help pay for local news and other programming.

Well, then one would need to convince over-the-air TV consumers that its local TV news content has increasing value. Maybe its content is even more valuable, as part of their cable, satellite, telco package, than say HGTV or MTV2 or ESPN News or Fox News Channel.

Trouble is, this kind of consumer marketing -- especially on TV -- is rarely used -- eliciting specific cost-value benefits per channel. Consumers are still more concerned with the overall picture -- why their monthly cable bill is $90, $110 or $120 and growing.

For sure -- on any pay TV service -- consumers want big TV networks, which are attached to TV stations affiliates, on their pay TV package. And especially now, with new lower-cost virtual linear, live pay TV platforms.

So more marketing is needed to make thing clearer.

Still, what if wide-scale blackouts via big TV stations groups do come — and for a long period of time? Should there be big fines to pay?

If consumers want growth beyond existing federal rules, they will have to give up something. That could mean traditional TV content owners. Sinclair, tell viewers that.

m&a, tv

3 comments about "Will Sinclair's Purchase Of Tribune Cause More Blackouts?".

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Ed Papazian from Media Dynamics Inc, April 23, 2018 at 9:35 a.m.
Wayne, if this deal goes through and Sinclair is allowed to keep stations that cover 70% of U.S. TV homes, the obvious question is not so much about wrangling with cable systems and other content distributors over retransmission fees, but whether Sinclair will try to create its own national TV network. I would assume that this would be a prime objective and that were it to come to pss, the opening gambits would probably be in the news and daytime or early/late fringe arenas, not primetime where program costs are so high and the odds of success are dubious.
Reply

Paula Lynn from Who Else Unlimited, April 23, 2018 at 11:07 a.m.

Blackouts will definitely happen, just not as dead air.

Jonathan Hutter from Northern Light Health replied, April 23, 2018 at 2:23 p.m.

The obvious objective, as they've already shown, is a "localized" de facto network that directs the delivery of news content on a local level, while continuing to have plausible deniability of influence over that content.