The Realpolitik of the Sinclair-Tribune Merger

[Commentary] The controversy behind the Sinclair Broadcast Group’s $3.9 Billion cash and stock agreement to acquire 42 broadcast stations and other media assets from Tribune Media continues to swirl. If approved, the combined media entity will reach 72% of US households, a figure far beyond the 39% allowed by Congress. Adding fuel to the controversy is that far-right-leaning Sinclair Broadcasting only became compliant with the ‘39% Congressional rule’ when FCC Chairman Ajit Pai, an appointee of President Donald Trump, reinstated the UHF discount rule enabling Sinclair to count only half of its actual audience based on the premise that UHF has a weaker signal than the VHF band. The reality is that, since the move to digital TV, signal issues are a thing of the past, rendering the UHF rule obsolete. So, what’s going on here, and what does it tell us about the future of TV?

While many will try to take ideological sides on this issue, a fair debate begins with honest perspective. Below is a list calling out several false arguments and those groups exacerbated the problem.

• Anyone who tries to defend the re-instatement of the UHF Discount rule. The fact is that the rule was obsolete and brought back to cynically serve a political purpose.
• “The sky is falling!” The loudest critics claiming that Sinclair will have excessive market power, crush the competition, destroy democracy, and other hyperbole happen to be those organizations that are aggressively trying to preserve their own economic interests.
• Tribune executives. Rather than stand on principal, they remain silent about the deal because they stand to gain a lot of money should a successful merger happen. Sadly, many regular Tribune and Sinclair employees stand to lose their jobs, as overlaps and the labor-minimizing efficiencies become the norm.
• The American people. Largely oblivious to how this will impact their local news, US viewers could very well see their community, their nation, and their world through an extremist filter. It is this indifference that enables political officials to take advantage of the situation and skirt the rules to help their cause.
• FCC Chairman Ajit Pai and Commissioner Mike O’Reilly. Appointed to serve the best interests of the American people, they instead chose to rule in favor of a far-right political agenda.

Economic and political realities make it inevitable that the Sinclair-Tribune Merger will be approved. If the merger happens, short-term impacts will not be as dire as opponents predict. However, as time progresses, the lack of competition in local TV will inevitably lead to job loss, lower quality programming, and higher cost to consumers. The question that should be asked is this: Is Sinclair making a wise decision in investing in $3.9 billion in dying distribution model?