In May, Sinclair Broadcasting Group, the largest owner of local TV stations in the country, agreed to buy Tribune Media for $3.9 billion, including 42 stations, Chicago’s WGN America, and a minority stake in the Food Network. Nexstar and 21^st Century Fox had also bid on Tribune Media. According to The New York Times, this deal would allow Sinclair to reach more than 70 percent of American households, including major metro markets like Chicago, New York, San Diego, Seattle and Los Angeles. To formally oppose the acquisition to the Federal Communications Commission, a coalition has formed, calling itself the Coalition to Save Local Media.

Multichannel News reports that members of the coalition include the American Cable Association, Dish, Common Cause, Public Knowledge, Herring Networks, NTCA-The Rural Broadband Association, the Competitive Carriers Association, the Sports Fans Coalition and the Computer & Communications Industry Association. The coalition is concerned that Sinclair’s acquisition would impact the diversity of coverage and voice at the local news level, could increase retransmission fees and make it harder to compete for air time.

‘The combination of the two companies would create a broadcasting behemoth with unprecedented control over both the national and local television markets, inflicting tremendous harm to competition and consumers,’ said Matt Polka, president of the American Cable Association in a Multichannel News article.

‘We need a plurality of voices – not have a reversion to a central command and control approach that Sinclair infamously demands of its local stations,’ said Ed Black, president of the Computer and Communications Industry Association, whose members include Amazon, Google, Netflix and Facebook. ‘This principle is important culturally, economically and as a foundation for citizens participating in a democracy. We’re glad this group is coming together.’

Sinclair submitted a formal response to the ‘Applicants’ Consolidated Opposition to Petitions to Deny‘ to the FCC on August 22, followed by a less formal statement on its website on a page titled ‘Welcome, We Are Sinclair.’ In the informal statement, Sinclair said it is merging with Tribune Media to ‘ensure the future of free and local television.’

Here’s an excerpt from that statement:

‘We are proud to serve the public interest by providing this essential free service to our communities. But in today’s media landscape, it is becoming more and more difficult to sustain this business model. Local advertising dollars are increasingly spent on local media other than local television, which means it is harder to cover our operating costs with advertising revenue. The costs of programming, especially sports, continue to rise, making it harder to afford and offer the best quality programming free to our audiences.

It remains challenging for us to get fair compensation for our channels that we distribute on cable and satellite services, simply because historically they paid us nothing for them.

Size matters these days. The companies we purchase programming from are up to 50 times our size. The cable and satellite services we license our channels to are even bigger…over 50 and 60 times our size. Some people say that the combined Sinclair-Tribune group will be “too big”, the reality is that we will still be vastly smaller than the major forces in today’s media landscape. We need this modest amount of scale to preserve the free and local business model that has served the American public so well for the past many decades.’

Sinclair said the combined company, called Sinclair-Tribune, would allow them to:

• Compete for viewers in local markets with high-quality programming and original programming
• Invest in local news and community programming
• Be innovative so they can add mobility and functionality to broadcast TV

In the formal response to the FCC, Sinclair essentially says that petitioners who want the FCC to deny the acquisition have made unsubstantiated, unsupported claims and that they’ve provided no evidence to show that the merger would violate any FCC rules. They also assert They concluded their opening remarks with this statement:

‘At bottom, each of the petitioners is either trying to use this proceeding to stifle competition for its own economic interests or is still living in a pre-cable, pre-internet, pre-smartphone world, untethered from the economic realities of the current media market. Sinclair and Tribune ask the Commission to see these transparent and/or naïve attempts for what they are, dismiss or deny the petitions in full, and grant consent to the proposed transaction.’

The Coalition to Save Local Media spoke out after reading Sinclair’s FCC filing in response to petitions to deny the Sinclair-Tribune merger, reports Multichannel News.

‘Sinclair-Tribune has failed to explain how this multi-billion-dollar merger is in the public interest,’ the coalition said. ‘This merger continues to raise substantial legal and policy questions – including compliance with Federal Communications Commission rules – that remain unanswered by Sinclair-Tribune.’

‘Sinclair-Tribune’s response today leaves too many questions unanswered about the public interest harms caused by the proposed merger,’ the coalition added. ‘There is no basis for the FCC to allow this merger to proceed. The FCC and Department of Justice should reject this merger.’

Insider Take:

Is it just me or does this feel like a tennis match, watching the ball lobbed back and forth over the net? First, Sinclair-Tribune announces the merger. Next, a variety of groups speak against it, eventually forming a coalition to formally object to the merger. Then Sinclair-Tribune makes formal and informal statements, telling the FCC and anyone who cares to listen why this deal is in the public interest. The coalition then rebuts with ‘so what?,’ alleging that Sinclair didn’t sufficiently address their concerns in their formal response.

This is a $3.9 billion merger, so there is a lot at stake and the issues are complex, addressing a host of issues and not something that will be analyzed or decided by the FCC overnight. Unlike the Amazon-Whole Foods deal, this is far from a slam dunk, and it could drag out for a while. Regardless of the income, this merger (or lack thereof) will have an impact on how we watch TV in the future, whether it is a network broadcast on cable TV or a streaming video-on-demand network like Dish, Netflix or Sling TV. We’re staying tuned…