ACA, Dish: Sinclair Fails to Make Case for Tribune Deal - Broadcasting & Cable

ACA, Dish: Sinclair Fails to Make Case for Tribune Deal

Respond to Sinclair defense of merger
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The American Cable Association and Dish, which are both members of the Coalition to Save Local Media, which is a coalition to fight Sinclair's proposed purchase of Tribune stations, are both telling the FCC that Sinclair did not come close to justifying the $3.9 billion merger.

That came in comments replying to Sinclair's defense of the deal, which was filed Aug. 22.

"[E]ven after another round of briefing and nearly seven pages devoted to Sinclair and Tribune’s apparent offense at those who oppose the proposed transaction, the Applicants offer virtually no explanation and no relevant evidence in support of the applications," ACA told the FCC. "The Applicants also mischaracterize the burden of proof in this matter—suggesting that it falls on the opponents when, of course, it falls on the Applicants."

Dish said that Sinclair had essentially conceded to an adverse competitive effect of the merger without offering any public interest benefit to outweigh it.

“The main point of the Applicants’ Opposition is also one of their important, if unwitting, admissions. They argue that the merger will give New Sinclair the size necessary to take on ‘much larger companies’—the large ‘MVPDs with nationwide or near-nationwide footprints,' said Dish. "This illuminates Sinclair’s true motivation for this transaction: that the merger will allow it to charge higher retransmission fees. Incredibly, the Applicants believe that this will be a good thing, because it will remedy what they call, inaccurately, the ‘historical undercompensation of broadcasters.’” 

But, as DISH explains, “the only people that stand to benefit from these increased prices are New Sinclair’s shareholders. This is hardly a public interest benefit. And, what is more, these claims of undercompensation do not matter under the applicable merger standard. If a merger is likely to increase prices, this is an adverse competitive effect that needs to be offset by countervailing benefits. Here there are none. "

"Applicants wrongly contend that the FCC has no role in evaluating whether the resulting broadcasting behemoth will harm competition," ACA said/ "Analyzing competitive harm is at the heart of the FCC’s public interest analysis, and—even if there were no per se rules prohibiting the proposed transaction—the applications should be denied under traditional antitrust principles."

Sinclair spent many pages arguing for the public interest benefits of the deal. But Dish says the broadcaster was missing the mark. It said Sinclair had "set the bar improperly low for themselves by suggesting that Sinclair’s performance of its fundamental duties as a broadcaster will be a ‘benefit’ that will accrue to New Sinclair as a result of the company’s ownership of Tribune. These claims in fact showcase Sinclair’s current lack of commitment to its duties.”

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