Sinclair buttering up FCC chief amid rumored Tribune bid, report says

Sinclair
Broadcasters like Sinclair and Nexstar—which recently completed its $4.4 billion acquisition of Media General—are confident that the new FCC under Pai will relax the ownership rules that have capped the number of stations a company can own in one market.

Sinclair Broadcast Group has reportedly been buttering up FCC Chairman Ajit Pai as it seeks regulation reform to further its broadcast TV consolidation ambitions, including a reported bid for Tribune Media.

According to Bloomberg, the broadcaster had Pai speak at a company conference at Baltimore’s ritzy Four Seasons hotel just days after the presidential election. An FCC spokesperson told the publication that the appearance was arranged before the election and that Pai was there to talk about broadcasters’ roles in the media marketplace. Still, the event ended up giving Sinclair close access to the next chairman of the FCC.

Craig Aaron, president of the policy group Free Press, also told the publication that Sinclair is “actively courting” Pai and hoping he will alter ownership rules so Sinclair can do “whatever kind of deals they want to do.”

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RELATED: Editor's Corner—From spectrum auction disappointment springs broadcast consolidation hopes

Broadcasters like Sinclair and Nexstar—which recently completed its $4.4 billion acquisition of Media General—are confident that the new FCC under Pai will relax the ownership rules that have capped the number of stations a company can own in one market.

“Well, we do anticipate there will be deregulatory activity … as we roll through the year. Some things will happen sooner than others. We're optimistic that the UHF discount will be reinstated and then an NPRM issued to discuss all ownership rules, both local and national that the FCC I think will work through,” said Nexstar CEO Perry Sook, according to a Seeking Alpha transcript.

The current ownership cap, which controls how much reach individual broadcasters can acquire, dictates that a broadcast station group’s audience reach should not exceed 39%. But that cap could be easier to work around if the FCC decides to revamp the UHF discount.

Last year, the FCC changed the UHF discount governing ownership rules for broadcast stations so that UHF stations would now have to count 100% of their reach toward the cap, instead of the previous 50%. Broadcasters like CBS have urged the FCC to reinstate the UHF discount before making any further reforms on the ownership rules.

RELATED: Fox might stick wrench into Sinclair’s pursuit of Tribune: report

Sinclair’s push for changes to ownership rules for broadcasters come as the company’s reported pursuit of Tribune Media assets including all of Tribune’s stations and cable networks appears to be on the fast track.

The New York Post recently cited several sources who said the companies are discussing a price of about $40 to $41 per share for a deal that would include all 42 Tribune TV stations and Tribune’s stakes in the Food Network and WGN.

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