The American Cable Assn., Time Warner Cable and DirecTV are objecting to a part of Gannett’s proposed $2.2 billion acquisition of Belo Corp.’s broadcast stations, saying that the deal threatens to drive up retransmission fees and risk even more station blackouts in negotiation standoffs.
Their objections were raised in a filing with the FCC, which is considering the transfer of five Belo stations in St. Louis, Phoenix and Tucson markets to Sander Operating Co. and Tucker Operating Co. The ACA, Time Warner Cable and DirecTV say that such a transfer is a means to rely on “a series of shills or ‘third-party sidecars” and get around rules limiting ownership of stations in the same market.
They contend that although the transaction calls for Gannett to divest Belo’s TV assets in the three markets, “Gannett will retain effective control of all of these stations through various sharing agreements under which it will establish duopolies in each” city. They contend that Gannett’s agreements with Sander and Tucker will result in “collusive negotiations” of retransmission agreements in St. Louis, Phoenix and Tucson. As an example, they said that under an agreement that Gannett “intends to execute” with Sander and Tucker in the Tucson market, Gannett would be the agent for them for restrans or other distribution agreements.
The stations at issue are KMOV-TV in St. Louis, KTVK-TV and KASW-TV in Phoenix and KMSB-TV and KTTU-TV in Tucson.
Gannett’s deal for Belo will nearly double its broadcast holdings from 23 stations to 43, with stations in 21 of the top 25 markets.
Update: In a statement, a spokesman for Gannett said, “The transaction is entirely consistent will all FCC rules, policies and precedent, and will bring substantial benefits to the public.”