Know Your Media Owners: Sinclair Broadcasting Group

Sinclair Broadcasting Group was founded in 1986 by the four sons of Julian Sinclair Smith, who founded the first UHF station in Baltimore in 1971. In the early 1990s, after the brothers bought controlling interest in the company from their parents, SBG began buying stations. Within a decade of its founding, Sinclair would become the largest commercial broadcasting network not owned by a network. Today, Sinclair owns or manages 58 stations in 36 markets. Sinclair controls stations affiliated with six major networks. These stations reach 22% of U.S. households.

Sinclair has been the center of some controversy in recent years. In 2002, the company created a local news network that acted in conjunction with a centralized news operation. Critics believe that plan was detrimental to local news because it would deemphasize local stories that a centralized news network could not produce. In 2004, Sinclair took heat for attempting to show an anti-John Kerry film several days before the presidential election.

More information:
CJR Who Owns What?

NBC Universal Cuts Effect Local Stations

From Washington Post, November 29, 2006:

In a generational change of local TV news personalities, WRC (Channel 4) has in recent weeks begun eliminating some of its most familiar faces as part of a cost-cutting drive by its owner, NBC Universal. Yesterday, Arch Campbell -- the station's avuncular entertainment reporter/reviewer -- became the latest News4 star to announce he was severing ties with the station.

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WRC is a highly profitable operation (Jack would not release specific figures) that has long enjoyed a market-leading position. The station nevertheless has been swept up by the "NBC 2.0" program, a broad initiative by NBC Universal to cut more than $750 million in expenses from its news and entertainment operations and trim about 700 positions (roughly 5 percent of its employees).

NBC Universal owns 10 NBC stations, 15 Telemundo stations and one independent station, all of which are in large markets. How deep the cuts into these stations are will determine how much effect they will have on the quality of news on these stations.

Tribune Co. Rejects Consortium Inquiry About Baltimore Sun

From Washington Post, November 28, 2006:

The embattled Tribune Co., which has put its 11 newspapers and 25 television stations up for sale, is not ready to consider bids for individual properties, the company said in an e-mail exchange with a Baltimore investor group.

Ted Venetoulis, a businessman and former local politician, is leading a consortium of prominent Baltimoreans who want to buy the Sun, if Tribune decides to break up the company and sell it piece by piece.

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...Tribune declined Venetoulis access to the Sun's books, saying the company continues to seek a single buyer for all of its properties.

FCC Media Ownership Policies Make Television’s “Vast Wasteland” Even Vaster, Creative Voices Tells Commission

From The Center for Creative Voices in Media, October 23, 2006:

Misguided FCC media ownership policies harm competition, diversity of viewpoints, and localism – the Commission’s key policy goals in regulating media ownership – and prevent the American public from receiving better broadcast television, the Center for Creative Voices in Media told the Commission in comments filed today.

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General Electric’s recent announcement that it would reduce or eliminate scripted programming on its NBC network in the 8-9 p.m. hour of primetime is particularly illustrative of the unintended harmful consequences of FCC policy changes that have had the practical effect of eliminating independently-produced programming from the public’s airwaves.

O.J. Book Event Could Effect Cross-Ownership Rules

From Advertising Age, November 27, 2006:

Even though Fox Broadcasting's O.J. special was canceled, it still may have done lasting harm to the broadcast industry.

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The backlash comes at a sensitive time for broadcasters, which have been battling the belief that cross-media ownership gives them too much power -- and some fear the incident gives ammunition to their foes. The Federal Communications Commission is reconsidering rules that determine whether media companies can own more than two TV stations in a market, as well as whether those that own radio stations and newspapers should also be allowed to own TV stations.

News Corp.'s Fox is at the forefront of a broadcast-network-TV push to be allowed to buy more of its affiliate stations.

"Think about how much O.J. they could have crammed in if they owned three TV stations, eight radio stations and the local paper in your town," said Craig Aaron, communications director for Free Press, a group campaigning against loosening of the rules. "It certainly doesn't help Big Media's case for throwing out the rules."

Taking into account how irresponsible actions of media conglomerates, like publishing, promoting and broadcasting an accused murderer's would-be confession, the FCC should see that the potential for abuse of power of the media is real. The O.J. book would have made a lot of money for News Corp., so it was in the companies best interest to use as much of their own company's resources to promote it as possible. Craig Aaron is right that News Corp. would have had this story everywhere. The FCC should recognize that unethical behavior like this is likely if cross-ownership rules are weakened.

Additional stories:
Rintels on O.J. Flap: "The Dark Side of Synergy"

FCC Announces 10 Studies on Media Ownership

FCC Public Notice, November 22, 2006:

The Commission will be conducting 10 economic studies as part of its review of its media
ownership rules. Each of these studies will be peer reviewed.

Included in these are studies on the effect of ownership structure on programming in television and radio, news coverage of cross-owned television stations and newspapers, and a study on how people get news, which will be conducted by Nielsen. With the announcement of such a comprehesive set of studies, the FCC is showing that it is sensitive to the fears espoused by very many people during the last round of public hearings on ownership rule changes. This public announcement will also help to ensure that the results of these studies will be presented, regardless of their findings. Given the recent controversy concerning the suppressed localism study, that is a good sign that the Commission is taking this issue seriously and will act more transparently than it has in the past.

Private Equity Firms Becoming Big Players in Media

From New York Times, November 17, 2006:

Some of the largest broadcasters and publishers are being swept into the arms of private equity firms, which are drawn to the rich cash flows these businesses generate and are undaunted by their slowing growth. The trend could raise new regulatory concerns, however, as some of the big private equity firms start to weave a complex web of cross-ownerships in the industry.

The latest example is Clear Channel Communications, the nation’s No. 1 network of radio stations, including Z100 in New York and KIIS-FM in Los Angeles. Yesterday, the company agreed to be acquired for $18.7 billion by Thomas H. Lee Partners and Bain Capital in the largest buyout ever in the media and entertainment industry, according to Thomson Financial.

Just a few months ago, two private equity groups were locked in a bidding war for Univision Communications, the largest Spanish-language broadcaster in the United States. The winning consortium agreed to pay $12 billion for the company. And yesterday, the Reader’s Digest Association, publisher of Reader’s Digest magazine, agreed to be taken private for $1.6 billion by a buyout consortium led by Ripplewood Holdings.

This is an interesting trend. The potential for cross-ownership within these firms should be closely watched by the FCC.

Clear Channel Sale to End Era...or Will It?

From Washington Post, November 17, 2006:

Clear Channel Communications Inc. has agreed to sell the company to a consortium of private-equity firms and plans to shear off more than one-third of its 1,150 radio stations, dismantling a giant that dominated the industry and became the bogyman of media consolidation for the past half-decade.

The deal is worth $26.7 billion dollars. The plan to sell one-third of its radio stations, 448, to be exact, is coupled with a plan to sell its 42-station television group. The Washington Post may be off base in saying that the selling of one-third of its stations will "dismantle" the media giant, though, when you consider:

None of the 448 radio stations are in the top 100 markets in the United States. Over all, the properties to be sold accounted for less than 10 percent of Clear Channel’s $6.6 billion in revenue last year, the company said.

Even with those sales, Clear Channel will remain a broadcasting behemoth, and its proposed buyers already have big media investments. This combination could raise concerns among regulators. (New York Times, Nov. 17, 2006)

It seems the investors are simply shearing the stations that get the least bang for the buck. These stations may be small market stations facing debt from digital switch costs in recent years, and the new owners of Clear Channel may be trying to sell the burden of those debt, which will be slow to recover to someone else. It's worth looking into.