Pallone Wants Hearing on Disney/Fox

Says it should be part of larger look at broadcast marketplace
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House Energy & Commerce Committee ranking member Frank Pallone Jr. (D-N.J.) has called for a hearing into the proposed Fox asset sale to Disney.

Pallone tied it to the proposed Sinclair-Tribune deal, at least in terms of being on the heels of that proposal--though long heels since it dates from last spring--saying it had been over two years cine the committee looked at the state of broadcast ownership.

He actually wants a broader hearing, he said in a letter to Committee Chairman Greg Walden (R-Ore.), looking seriously at "all of the issues related to the video marketplace," but with a special focus on the most recent deal.

The deal faces antitrust review--any deal valued over about $76 million and this one tops $50 billion--gets that review. Justice could look hard at Disney heavying up in the sports content department, combining Fox's regional sports nets and ESPN (DOJ pointed to the Turner must-have sports content as one reason it was trying to block the AT&T/TW deal. It is less clear whether the FCC will have a role in the deal, which would depend on the transfer of licenses--perhaps on the ownership positions of the Murdochs in both Fox and Disney given that each of those companies owns a network and there are limits on ownership interests in dual networks (under 5% of voting stock). But it would depend on how the deal is structured and how the ownerships of the individuals involved are attributed. AT&/TW was structured to avoid getting the FCC involved.

"The worst case scenario is that Murdoch might need a waiver of the dual network rule," said one veteran communications attorney.  "One can assume that Chairman Pai might be quite willing to accommodate him."

“As the Committee with primary jurisdiction over the media industry, we have a responsibility to understand the potential effect of this merger on consumers and the media marketplace,” Pallone told Walden. “The Committee’s oversight into these proposed mergers has been lacking.  Despite repeated calls from Democratic members, this Committee has not had a single hearing to look at the changing video marketplace in more than four years — before many online video services had even launched.”

There is plenty of new fodder in the broadcast ownership space given the FCC decision this week to review the 39% ownership cap and UHF discount, plus the recent decision to eliminate crossownership rule and allow at least the possibility of ownership of two of the top four stations in a market on case-by-case basis, which had been previously prohibited, period.

With Republicans controlling the calendar, asking for a hearing and getting one are two different things. A House Energy & Commerce Committee spokesperson was unavailable for comment at press time.

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