Have you ever heard of the Sinclair Broadcast Group? Chances are, unless you closely follow the television provider space, you have not. Well, that’s all about change. The Sinclair Broadcast Group recently announced that they are in the process of acquiring Tribune Media for $3.9 billion, plus an additional $2.7 billion in debt.
Why does this matter? It matters because, while the Sinclair Broadcast Group has been relatively unknown, they are one of the largest and dominant media companies in the United States. Prior to this purchase Sinclair owned 170 local television stations; though most are not in the major media centers like New York and Los Angeles. Tribune owns 42 television stations in 33 markets, including New York and Los Angeles. If this merger goes through, Sinclair will become the owner of one-third of all the local television stations in the US market.
This deal would provide Sinclair with a market dominance rarely seen before, because until now, it has always been illegal. The Federal Communications Commission (FCC) previously had rules in place to prevent any one company from owning too many television stations. However, once the Trump administration came into power and Ajit Pai became the head of the FCC, those rules were thrown out.
Once the FCC opened the loophole in these laws, the race was on towards consolidation. If one company (like Sinclair) can control enough stations they will have the leverage needed to push through lucrative deals and bully smaller players out of the space. It essentially creates a monopoly that will only become more powerful as time goes on.
This is also important from a political perspective. The Sinclair Broadcast Group is owned by the Smith brothers, whose conservative beliefs are comparative to those of Roger Ailes and Fox News. They have a history of pushing those beliefs onto the Sinclair group, going so far as to have their anchors read statements of support for President Bush following the 9/11 attacks. There is little doubt that they will continue to push their political agenda to all of their TV stations. If this merger goes through, Sinclair will own stations in seven of the top ten marketings in the US.
This deal is not yet set in stone, it does have to be reviewed by the FCC. However, given the FCC’s newfound stances under the new administration it is unlikely that this will be struck down. If this deal does go through this will be a huge change for the broadcasting space. In time, The Sinclair Broadcast Group could be the next Fox News.
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