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Sinclair's new dispute with DirecTV

So Sinclair TV stations have started their campaign to pressure DirecTV to pay more money for retransmission. Since I'm in the rare market where Sinclair owns four full power TV stations it got me to thinking. How will the FCC respond if/when Sinclair pulls the ABC, NBC, and MyNetwork affiliates from DirecTV? This certainly won't help Sinclair's case that they should be allowed to actually own 4 stations including 2 of the Big 4 in the same market. Or will Sinclair's growth actually backfire on them and have their legal department afraid of the consequences the FCC might throw down if they go through with pulling ABC and NBC from DirecTV?

Opinions? More info that I'm not seeing?
 
Poledo was referring to the Mobile, Alabama-Pensacola, Florida TV market.
 
The Sinclair Broadcast Group purchased WEAR-TV (the ABC affiliate) and WFGX-TV (the MyNetworkTV affiliate) in the Mobile, Alabama-Pensacola, Florida TV market years before purchasing WPMI-TV (the NBC affiliate) and WJTC-TV (the independent station) in the same market and selling the broadcast licenses of those stations to Deerfield Media, Incorporated. Here is a link to more details about the deal that involved WPMI-TV and WJTC-TV.
 
Don't know how Deerfield is currently involved. I do know that both channels 3 an 15 have "copywrite 2013 Sinclair Broadcast Group" at the end of the news and all 4 stations are telling viewers to contact DirecTV or look for a new provider.

I'm interested in how folks involved in FCC policy debate would look at this case.
 
On what grounds would you suggest the FCC now get involved? The rules Sinclair is working under, whether you like them or not, are the FCC's own rules. As long as the actual Deerfield licenses are held by a separate party - and they are, technically - Sinclair is allowed to enter into contracts with the Deerfield stations to manage their retransmission-consent deals with cable and satellite providers. Sinclair is also legally allowed to produce newscasts and supply them to the Deerfield stations under shared-services agreements. The WPMI newscasts are "copyright Sinclair Broadcast Group" because they are, in fact, produced by Sinclair and supplied to WPMI under contract, just like all the other programming WPMI acquires from "outside" sources.

Does owning or managing four stations give Sinclair undue leverage against DirecTV? Perhaps - but is that any more undue leverage that DirecTV exerts by virtue of being one of only three or four multichannel TV providers in a given market?
 
Is this only for the Moblie/Penascola stations only or all Sinclair's stations? We have one station
WTWC-DT 40 in Tallahassee that own Sinclair.
 
The 2 Sinclair owned channels and one sub channel in Cincinnati are running that same crawl. WKRC was recently acquired from Newport Television. WSTR is now under Deerfield.
 
All Sinclair stations including WTWC.

I was under the impression that Sinclair kept the Mobile stations under the Deerfield sub corp with the assumption that the FCC would soon change the laws and allow a single corp to own 4 stations in a market the size of Mobile. If Sinclair winds up pulling their 4 Mobile stations from DirecTV Sinclair will be showing the FCC and the public why multiple ownership could be a bad idea.

I'm looking at this situation trying to figure out if it will effect future FCC policy.

I don't believe I have an opinion on this right now but I thought some of you, especially Fybush, would have strong opinions on this situation.
 
Louis_009 said:
Is this only for the Moblie/Penascola stations only or all Sinclair's stations? We have one station
WTWC-DT 40 in Tallahassee that own Sinclair.

All of the stations owned and/or operated by the Sinclair Broadcast Group were involved in the company's negotiations with DirecTV, according to this article from Multichannel News.

By the way, WPMI-TV actually began using the words "Copyright Sinclair Communications LLC" for the final segments of their newscasts after the end of the deal with the Sinclair Broadcast Group. WEAR-TV continued to use the words "Copyright Sinclair Broadcast Group" to end their newscasts after the deal.
 
Aren't WEAR/WFGX and WPMI/WJTC under separate management in lieu of being managed by the same company? Given how the former pair totally ignores the Alabama half of the DMA and how they haven't consolidated news departments nor have real incentive to do so, this is more loophole exploitation.

Of the quadopolies which came out of Newport's end, Nexstar/Mission in Little Rock is far, FAR worse because aren't all 4 stations there under joint control?
 
poledo said:
I don't believe I have an opinion on this right now but I thought some of you, especially Fybush, would have strong opinions on this situation.

What sort of strong opinion did you expect me to have?

I don't think the current retrans-consent system does much to benefit the viewer. After the last few years of largely pointless standoffs between station owners and cable/satellite companies, I have to believe the average viewer caught in the middle of one of those disputes probably ends up thinking less of both the broadcasters and the cable or sat companies. I also don't think there's much evidence that consumers really vote with their feet the way the TV stations hope they do. After all, if I'm in a market where my local Sinclair station (or stations) is playing hardball now with DirecTV, why would I be inclined to switch to Dish or my local cable or telco if I know that same station will play the same kind of hardball down the road with my new provider when the time comes?

I'm somewhat sympathetic to broadcasters needing to find new revenue streams. Stations no longer get affiliation compensation from their networks, and often have to pay reverse compensation. So if Congress and the FCC say they can seek money from the cable/satellite companies that benefit from carrying their signals, why wouldn't any smart station owner try to milk that revenue stream as hard as it can?

And having said that: if pretty much any station owner these days is going to try to go after that revenue stream, and if most of them will be willing to force a showdown like the current Sinclair/Direct dispute, how does multiple station ownership or control really change anything? If Sinclair didn't control WPMI/WJTC, do you think another owner would be any less aggressive in pursuing retrans fees?
 
I don't believe WPMI and WEAR have consolidated much yet. I base this on my observations of the stations typically giving very different weather forecasts for the DMA. It's a pretty weak point to base my statement on, but it does seem logical that co-owned weather departments would at least comunicate with each other and put out matching forecast.
 
Scott, the word strong was out of place. I wasn't expecting an opinion on retransmission consent but I appreciate your input on that topic. I was expecting you to have an opinion on Sinclair or anyone else owning two of the big four on full power sticks in a market the size of Mobile. Mobile's certainly big enough to support another owner for ABC or NBC. There was no financial hardship involved in this merger. I would totally support one corp owning all of the big four in Glendive. I support the idea of two companies owning all of the big four in Biloxi (but they only have two full power stations in Biloxi which makes that a different topic). But the Mobile market is most defiantly large enough for four owners controlling the networks and there are plenty of full power stations so no one has to multicast to get it done. The way things are playing out in Mobile today appears to give Sinclair borderline monopoly status or at minimum far too much power when it comes to negotiating and setting values in retransmission or even advertising.


Maybe the FCC should allow COX to purchase the Mobile Press Register and a couple of TV and radio stations in this market to bundle with their CATV holdings here? That seems more reasonable than putting ABC and NBC under the same umbrella seeing that the newspaper is desperately trying to stay profitable and Cox cable is loosing customers hand over fist to Sat and UVerse.


Am I making much sense?
 
I'll respond to that question in a second, but first, a response to your preceding post:

I think two things are being conflated here: there's "control" in the sense that a group of stations is being run by the same local managers and staff (which is apparently not the case, at least not yet, at WPMI/WTJC and WEAR/WFGX) and "control" in the sense that a single corporate office is overseeing something like group-wide retrans-consent deals.

Whatever's happening at the local level in Mobile and Pensacola, it's not those local managers who have any say in whether their stations continue to be seen on DirecTV. As with any other big group owner, that decision is made entirely at the corporate level - and to that extent, WPMI and WEAR are joined firmly at the hip.

(WPMI and WEAR are hardly the only Newport/Deercliff/Sinclair combination still in transition where local operations are concerned; up here in Rochester, Sinclair's Fox affiliate WUHF remains in an LMA under which it's operated by Nexstar CBS affiliate WROC, even though Sinclair itself now operates WROC's archrival ABC affiliate, WHAM-TV, which went from Newport to Deercliff. Sometime later this spring, as soon as Sinclair can extricate itself from the Nexstar LMA, operations of WUHF will shift from WROC to WHAM-TV...but it's a long few months of competition in the meantime. In that case, however, Sinclair retained the retrans-consent rights for WUHF, so the "we're being pulled from DirecTV" crawls are running on WUHF tonight.)
 
poledo said:
The way things are playing out in Mobile today appears to give Sinclair borderline monopoly status or at minimum far too much power when it comes to negotiating and setting values in retransmission or even advertising.

Maybe the FCC should allow COX to purchase the Mobile Press Register and a couple of TV and radio stations in this market to bundle with their CATV holdings here? That seems more reasonable than putting ABC and NBC under the same umbrella seeing that the newspaper is desperately trying to stay profitable and Cox cable is loosing customers hand over fist to Sat and UVerse.

Am I making much sense?

I follow where you're going here, now.

Let me say first of all that I've never been to Mobile or Pensacola (and need to fix that one of these days), so it's hard for me to say from a distance how much ownership is too much ownership.

Easy answer, off the top: because retrans consent is negotiated on a national scale between broadcast companies and cable/sat companies, it probably doesn't make a bit of difference whether Sinclair owns/controls one station or four in any given market. The leverage Sinclair holds over Direct or Dish or Cox or TWC stems much more from the total number of markets in which it's present than from the number of stations it controls in each. If anything, it seems to me that owning more stations gives a group a little more of a fair shot against a national player like Direct or Dish.

More complicated answers: The media world is changing incredibly quickly right now, and ownership regulation isn't even coming close to keeping up. Pretty much everyone these days (including many FCC commissioners) agrees that we are long past the time when owning a daily newspaper provided so much media dominance by itself that cross-ownership between that newspaper and radio/TV/cable should still be automatically banned. But in decades of batting the issue around, nobody's quite been able to come up with a way to repeal that ban that will get through both the FCC and Congress, so it remains on the books.

From what I know from a distance about Mobile and Pensacola, I think it's fair to say that they're a little unusual as DMAs go. If TV stations were being allocated to the region for the first time today, instead of in the 1950s, I think it's likely that Mobile would be its own DMA separate from Pensacola/FWB - and that both would thus be smaller markets than the combined Mobile/Pensacola DMA is now.

It's my guess (and please correct me if I'm wrong!) that for local advertisers, Mobile and Pensacola/FWB sort of function as separate markets anyway. There are a handful of "cobbled-together" DMAs that share TV stations but don't have much overlap across the rest of the media landscape - if you're in Springfield, Illinois, you read different newspapers and listen to different radio stations and thus live in a rather different advertising landscape from the people in Danville or Champaign-Urbana, 80-some miles away, right?

In cases like that, it's always seemed to me that the TV stations end up functioning a little different from the way they'd operate in other DMAs that might be the same size on paper but are more coherent geographically. Instead of competing against one newspaper and three or four radio clusters that service the same large-ish market (and can charge similarly large-ish market rates), a TV station in a cobbled-together DMA like Mobile-Pensacola or Johnstown-Altoona or Chico-Redding has to compete against a larger number of smaller, more nimble radio and newspapers that can charge a lot less for ads that are better targeted to the areas local advertisers really serve.

Which is a long-way-round way of saying that in your particular case, I'm not convinced that it's an absolute given that Mobile/Pensacola really can support four completely separate TV operators. Sure, operating the NBC and ABC affiliates (and WFGX and WJTC) gives Sinclair somewhat more leverage to set ad rates...but maybe not as much as you'd think, especially on the Alabama side, where WALA and WKRG probably have a lot more influence over ad rates than WPMI could ever hope to have. And, again, that's just TV...add in two newspapers and a whole bunch of radio clusters on both sides of the state line, and local cable ads, and Groupon, and outdoor, and direct mail, and the reality is that local advertisers in Mobile and Pensacola (and pretty much anywhere else in the country) likely have more options now for good ways to reach an audience than they did 30 or 50 years ago.

One more thought here: I've long believed that the bigger problem with ownership-cap deregulation isn't on the local level, but rather national. What would serve Mobile better: the present situation where you've got three competing TV operators, one formerly-daily newspaper, several radio clusters, a cable company and UVerse all owned by bigger national players with no specific interest in Mobile...or a scenario that might have put the newspaper and a TV station and a radio cluster all under one owner - if that one owner had to abide by a national cap that limited it to operating in only a handful of markets?
 
Interesting situation in San Antonio, where three stations are affected: KABB (Fox), KMYS (CW) and WOAI (NBC), which they recently bought from Newport. Deerfield technically owns KMYS, but c'mon ...
 
Scott Fybush said:
From what I know from a distance about Mobile and Pensacola, I think it's fair to say that they're a little unusual as DMAs go. If TV stations were being allocated to the region for the first time today, instead of in the 1950s, I think it's likely that Mobile would be its own DMA separate from Pensacola/FWB - and that both would thus be smaller markets than the combined Mobile/Pensacola DMA is now.

It's my guess (and please correct me if I'm wrong!) that for local advertisers, Mobile and Pensacola/FWB sort of function as separate markets anyway. There are a handful of "cobbled-together" DMAs that share TV stations but don't have much overlap across the rest of the media landscape - if you're in Springfield, Illinois, you read different newspapers and listen to different radio stations and thus live in a rather different advertising landscape from the people in Danville or Champaign-Urbana, 80-some miles away, right?

In cases like that, it's always seemed to me that the TV stations end up functioning a little different from the way they'd operate in other DMAs that might be the same size on paper but are more coherent geographically. Instead of competing against one newspaper and three or four radio clusters that service the same large-ish market (and can charge similarly large-ish market rates), a TV station in a cobbled-together DMA like Mobile-Pensacola or Johnstown-Altoona or Chico-Redding has to compete against a larger number of smaller, more nimble radio and newspapers that can charge a lot less for ads that are better targeted to the areas local advertisers really serve.

Which is a long-way-round way of saying that in your particular case, I'm not convinced that it's an absolute given that Mobile/Pensacola really can support four completely separate TV operators. Sure, operating the NBC and ABC affiliates (and WFGX and WJTC) gives Sinclair somewhat more leverage to set ad rates...but maybe not as much as you'd think, especially on the Alabama side, where WALA and WKRG probably have a lot more influence over ad rates than WPMI could ever hope to have. And, again, that's just TV...add in two newspapers and a whole bunch of radio clusters on both sides of the state line, and local cable ads, and Groupon, and outdoor, and direct mail, and the reality is that local advertisers in Mobile and Pensacola (and pretty much anywhere else in the country) likely have more options now for good ways to reach an audience than they did 30 or 50 years ago.
I'd like to see the FCC either switch to the RabbitEars markets or something similar, or measure station reach based on actual signal coverage. Current FCC rules effectively not only legitimize and lend official primateur to, but actually enforce, the somewhat-outdated Nielsen markets (and in turn encourage cable dependence).

I've been batting around an idea that restricted duopoly ownership by counting the second station in a market as one-half the market's size towards the ownership cap, the third station as one-third, and so on. By my calculations, only CBS, Fox, and NBC would be directly affected by this given current limits (Sinclair might just barely crack that mark with some of its triopolies and quadopolies), but that would still be a massive boon to broadcasting (in my opinion) if it forces CBS to divest itself of its half of the CW, Fox to divest itself of MyNetworkTV, and NBC to divest itself of Telemundo (maybe not so much that last one), though that's getting very far off-topic.
 
This whole situation with Sinclair owning or controlling so many stations in the top 50 markets is enough to give you a migraine. You would think somebody will call foul by now on this idiocy, but there seems to be tacit allowance their mundane operation of TV stations. It would be one thing if they were putting out quality in their originally owned stations prior to this buying spree, but they haven't nor did they ever. Flagship WBFF had to beef up its news operations just to keep its Fox affiliation, but that is a lone outlier because most of their original stable of stations were lacking quality news operations or programming.
 
I agree that there is too much control, but I think Fybush is saying that if you feel that way, you're beef is with the FCC for allowing it. Sorry if that isn't what you're saying, that's how I'm reading it.

The FCC is still dealing with the digital transition mess from 2009, so they don't really care about things like this. And to top that all, they should be planning on the next transition.
 
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