Two Groups Ask FCC to Deny Gannett’s Purchase of Belo for Different Reasons

By Kevin Eck 

On Wednesday, the American Cable Association, Time Warner Cable and DirecTV asked the FCC to block part Gannett’s deal to buy Belo Corporation saying it will increase the likelihood of higher re-transmission fees, transmission blackouts and higher consumer costs.

The same day a group of six organizations petitioned the FCC to deny the deal because they contend it violates the FCC’s cross-ownership rule and its rule against duopolies and would lead to, “job losses and a considerable reduction in the quality of journalism for millions of television homes.”

Gannett has said it plans to transfer ownership of Belo’s stations in St. Louis (KMOV), Phoenix (KTVK-KASW) and Tucson (KMSB-KTTU) to former Belo executive Jack Sander and Ben Tucker, the former head of the Fisher station group. Gannett already owns KSDK in St. Louis and KPNX in Phoenix as well as a newspaper in the Tucson market and would use Sander and Tucker to avoid FCC regulations preventing such ownership.

The coalition made up of the Free Press, NABET-CWA, TNG-CWA, the National Hispanic Media Coalition, Common Cause and the United Church of Christ said in their petition,  “These arrangements attempt to mask the true intent and effect of the transaction: to allow Gannett to simultaneously influence and control multiple media outlets in the same local market in a way that is contrary to the public interest and otherwise prohibited by the Commission’s rules.”

While the three cable and satellite entities are asking the FCC to either block the sale or get a guarantee Gannett will “refrain from coordinating negotiations for carriage on behalf of any of their non-commonly owned stations in any of such stations’ markets.”

ACA, Time Warner and DirecTV, fear one would result of the deal would be that “Gannett-which would become the fourth-largest owner of television stations nationwide-would enjoy a significant increase in negotiating leverage based solely on its aggregation of market power.”

While the group of six organizations in their petition seemed to sum up the intent of both filings saying, “Even if they do not outright violate the rules, such sharing arrangements are not in the public interest because they reduce the diversity of viewpoints and reduce competition in the provision of local news and the sale of advertising.”