Broadcast Station Group Execs Don't Believe Sinclair-Tribune Decision Will Have a Detrimental Effect on Future M&A Discussions

Chief executives from some of the television industry's top broadcast TV station groups participated in an NAB Show New York panel today about the state of the local broadcast industry. The conversation dipped into the future of subscription, advertising and revenue streams on the local level, the impact of live sports as well as how station groups are beefing up regional programming efforts and local news. A significant theme throughout the discussion was "how much power is too much power" for broadcast TV groups acquiring smaller companies or stations, and should there be a cap? The conversation predictably turned to the Sinclair-Tribune debacle as an example. Tribune officially terminated its $3.9 billion agreement with Sinclair Broadcast Group back in August, after roughly 15 months of Sinclair revising its local station divestiture plan in an effort to appease the federal government's long-standing concerns. “Based on a thorough review of the record, I have serious concerns about the Sinclair-Tribune transaction,” Federal Communications Commission chairman Ajit Pai said at the time. “The evidence we’ve received suggests that certain station divestitures that have been proposed to the FCC would allow Sinclair to control those stations in practice, even if not in name, in violation of the law.” The panelists were asked to comment on whether they felt that the precedent which seems to have been set with the Tribune-Sinclair debacle could serve as a barrier to any future mergers and acquisitions. "What you saw happen there was most likely an isolated incident from a regulatory perspective," said Nexstar Media Group chairman, president and CEO Perry Sook. "I've been to the DOJ, I've been to the FCC, I've met with Ajit Pai, and said I think they're open for business, I think they're open to look at transactions ... and I don't equate big with bad. Each transaction, each argument, and each company's conduct should stand on its own." Sook, as well as Gray TV chairman, president and CEO Hilton Howell—whose company recently merged with Raycom Media—brought up the example of Hurricane Michael and how their respective companies' increased footprints allowed stronger coverage of the storm in the local communities on the Florida panhandle and across the Southeast. "A smaller, less resourced company might not have been able to do that," Sook remarked, in defense of the "don't equate big with bad" stance. "We have to do a better job of rehabilitating the reputation of this industry," Howell added more generally about Sinclair-Tribune. "Some of the things that happened in that process have painted us all with sort of an inaccurate brush." "I think it was a one-off," said Fox Television Stations CEO Jack Abernethy, who also touted the 'don't equate big with bad' sentiment. "I don't see any long-term change as a result of what happened there." Graham Media Group president and CEO Emily Barr said she mostly agreed with what had already been said, and that the circumstances in the Sinclair-Tribune case were unique. Sinclair CEO Chris Ripley will have the stage to himself at NAB Show New York on Thursday. Perhaps he'll respond to his rivals' remarks.