Sinclair to Use SSAs, JSAs to Comply with FCC Rules in Allbritton Deal, Sinclair says
Sinclair Broadcast Group will use shared service agreements and joint sales agreements to comply with FCC ownership rules in its $985 million buy of seven Allbritton TV stations, Sinclair said Monday. Along with seven ABC affiliates covering 4.9 percent of U.S. households, Sinclair will acquire Allbritton’s D.C.-area 24-hour local news cable channel, NewsChannel 8. The transaction will create “synergies,” Sinclair said. Free Press attacked Sinclair’s “rapid expansion.” “The FCC needs to scrutinize these proposed deals and stop allowing covert consolidation through shared services agreements that allow Sinclair to run two or even three stations in a single market,” said Free Press President Craig Aaron in a press release Monday.
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Sinclair will sell the licenses and “certain related assets” of WABM and WTTO in Birmingham, Ala., WHP-TV Harrisburg, Pa. and WMMP in Charleston, S.C., but continue to be involved with them “pursuant to customary shared services and joint sales agreements” to comply with the commission’s ownership rules, Sinclair said. Gannett’s recent buy of Belo also involves using SSAs to comply with FCC rules, and has been challenged by Time Warner Cable, the American Cable Association, DirecTV and multiple public interest groups.
Free Press said Sinclair already has deals pending before the FCC to buy “more than two dozen stations” from Barrington Broadcasting, Fisher Communications and Titan Television. The commission should “require stations Sinclair has indicated it will put up for sale as part of this deal to be sold to independent competitors, not Sinclair front groups,” said Aaron. “Sinclair has exploited loopholes and laziness at the FCC to build its empire,” he said.
The high price of the deal has to do with NewsChannel 8, Wells Fargo analyst Marci Ryvicker said in an email to investors: “We believe the cable news channel brings significant value.” The deal could lead to Sinclair rolling out a 24-hour news channel “across all of its markets,” said Ryvicker. Sinclair is “especially excited” to acquire NewsChannel 8 “for the content it can provide our existing news stations, but moreover because their regional cable presence provides the perfect platform should we decide to expand it into other markets,” said Sinclair CEO David Smith in a press release. The deal is expected to close in Q4, Sinclair said.