×
You will be redirected back to your article in seconds

FCC Eyes Raising TV Station Ownership Cap Amid Sinclair-Tribune Merger Review

The FCC has formally initiated a review of its rule that limits the number of TV stations that a single entity can own — an effort that will surely draw protest as it comes amid the commission’s evaluation of the mega-merger between Sinclair Broadcast Group and Tribune Media.

The FCC on Tuesday issued a notice of proposed rulemaking regarding the national ownership cap, which is now set at 39% of U.S. TV households. The Sinclair-Tribune merger as it stands would require divestitures for the enlarged company to remain under the 39% threshold. If the cap is raised significantly, Sinclair would not have to sell off as many stations.

The review of the ownership cap is tied to another decision made by FCC chairman Ajit Pai early on in his tenure that has also been criticized as a major benefit to Sinclair. The FCC’s so-called UHF discount — a formula for calculating a company’s TV station holdings against the 39% limit — was reinstated by Pai in April after it was eliminated by the previous FCC regime.

“Earlier this year, the Commission reinstated the UHF discount, finding that the prior FCC’s decision last year to eliminate it absent a simultaneous review of the 39 percent national cap effectively tightened the cap without determining whether that was in the public interest. Because the national cap and the UHF discount are inextricably linked, any review of one component of the rule must include a review of the other,” Pai said in a statement.

“Under the proposal that I shared with my colleagues today, we would go about determining the future of the national cap, including the UHF discount, the right way. Specifically, we would seek public input on whether to modify, retain, or eliminate the 39 percent national cap as well as the UHF discount.  With respect to legal authority, in 2016 the Commission ‘conclude[d] that [it] has the authority to modify the national audience reach cap, including the authority to revise or eliminate the UHF discount’; we will take a fresh look at this issue as well,” Pai said.

The notice of rulemaking means that the FCC’s review of the ownership cap will be opened up to public comments and replies in the coming months. That is sure to be a free for all among advocacy groups who are already on the offensive against the $3.9 billion union of Sinclair and Tribune. Even if the Sinclair-Tribune deal is approved by the FCC before a formal vote on raising the cap, Sinclair could cite the pending review as a reason to hold off on divestitures.

The national ownership cap was last raised in 2004. It was initially lifted in 2003 from 35% to 45%, but an outcry from independent TV station owners (who worried that the major networks would elbow them out of large markets) as well as media watchdog groups, Congress came up with a compromise solution of 39%.

The UHF discount allows owners of stations on the UHF band (14-64) to count those stations at only half of the actual coverage area of the markets they serve. The UHF discount had been in place for years but was rescinded in 2016 because the question of signal strength had become mostly moot in the era of digital broadcasting, and because the vast majority of TV homes receive signals through an MVPD. The restoration of the UHF discount made Sinclair’s acquisition of Tribune possible because most of Sinclair’s 170-plus TV stations are UHF outlets.

The fact that it was Congress that imposed the 39% solution on the station cap in 2004 has led to some debate about whether the FCC has the authority to make any changes. Pai has asserted the commission does have the right to review it as part of its mandate to enforce media ownership rules.

“A comprehensive review of the rule is warranted in light of considerable marketplace changes, such as technological developments and increased video programming options for consumers, since the cap was last modified in 2004,” Pai said.

The National Association of Broadcasters, which reps most of the nation’s TV station owners, declined comment on the news, reflecting the divide among its members on the how-big-is-too-big question. Karl Frisch, executive director of the consumer watchdog org Allied Progress, was among the media activists who were quick to blast the FCC’s move.

“The lengths to which Chairman Pai will go in order to help Sinclair monopolize the local television news industry is astonishing,” he said. “His move is not only the latest in a series of rule changes tailor-made for Sinclair’s benefit, it is an egregious, and likely illegal, example of overreach by the FCC.”

More TV

  • Writers vs Agents Packaging War WGA

    Agencies' Antitrust Suit Against Writers Guild Set for January Hearing

    The antitrust suit filed by Hollywood’s major agencies against the Writers Guild of America has been set for a Jan. 17 hearing. U.S. District Court Judge Andre Birotte issued the calendar update this week on the litigation, filed on Sept. 27 by CAA, UTA and WME after the agencies consolidated their individual agency suits. The [...]

  • Gabrielle Carteris SAG Awards

    Gabrielle Carteris Preps for 26th Annual SAG Awards

    SAG-AFTRA president Gabrielle Carteris is already looking forward to the 26th SAG Awards on Jan. 19, held in its usual location at the Shrine Auditorium in Los Angeles. “One of the best things about the SAG Awards is that it’s a peer-to-peer recognition,” she says. “It’s the highest honor for performers to be recognized by [...]

  • GoliathSeason 3CR: Greg Lewis/Amazon Studios

    'Goliath’ Renewed for Fourth and Final Season at Amazon

    Amazon has renewed gritty legal drama “Goliath” for a fourth and final season. The series centers on washed-up lawyer Billy McBride, played by Billy Bob Thornton, who seeks redemption after a client he successfully defended from a murder charge went on to slaughter a family. Thornton won a Golden Globe for his performance in 2017. [...]

  • Jon Favreau'The Mandalorian' TV show premiere,

    Jon Favreau Already Has a Star Picked for His 'Star Wars' Holiday Special

    The “Star Wars” franchise is no stranger to the strange and odd. But the wildest of all the offerings from the galaxy far, far away is the bizarre (but beautiful) “Star Wars Holiday Special.” And Jon Favreau is ready to resurrect it. The TV special celebrating the Wookiee holiday “Light Day” aired on CBS in [...]

  • Justin Marks FX

    'The Jungle Book' Writer Justin Marks Inks Overall Deal With FX Productions

    “Counterpart” creator and showrunner and “The Jungle Book” scribe Justin Marks has signed an overall deal to create new content for FX Productions. “Justin is a true creative talent and we feel fortunate to be his partners in supporting his vision of bold and ambitious storytelling,” said FX Entertainment original programming president Gina Balian. Marks, [...]

  • Tye Sheridan

    Tye Sheridan Starring in Survival Thriller 'Wireless' From Steven Soderbergh for Quibi

    Quibi has ordered another show with notable Hollywood talent attached: scripted series “Wireless” starring Tye Sheridan with Steven Soderbergh on board as executive producer. In the made-for-mobile-screens thriller, a smartphone has a central role. Sheridan (“Ready Player One,” “X-Men: Apocalypse”) plays a self-obsessed college student who is stranded in the Colorado mountains after he crashes [...]

More From Our Brands

Access exclusive content