Monday, June 05, 2017

Worse Than Fox! Trump’s FCC Revives Outmoded Rule To Let Sinclair Become The Fox Of Local TV News


-by Jack Hannold

While the FCC’s plan to drop net neutrality rules has garnered most of the attention that agency has received during the Trump Administration, another recent rule change, one seemingly tailored to help a media company even more radically rightwing than Fox, is getting less scrutiny.

The video above recounts how Sinclair Broadcast Group has been abusing its ownership of TV stations to promote conservatism in general, and the Republican Party in particular, for years. Sinclair’s “News Central” at its corporate headquarters in Maryland produces “must carry” programming for its stations, mostly pieces to be inserted in the station’s local newscasts. In December, the Washington Post analyzed Sinclair's pattern of pro-Trump propaganda.

Unlike Fox, Sinclair does not own a network. But like Fox, Sinclair owns TV stations-- and it owns, or controls, more stations than Fox.

Sinclair currently operates 173 TV stations, including both those it owns directly and those it controls through “Local Market Agreements,” or LMA’s-- contracts that allow one company to operate a station licensed to another company in return for a payment to the licensee. Some licensees are shell corporations controlled by Sinclair.

And now Sinclair has announced plans to buy Tribune Broadcasting. If regulators approve the deal, Sinclair will control the programming of an additional 42 stations-- some of them in major markets Sinclair has never been able to buy a station-- making Sinclair the largest single TV broadcaster in the US. Sinclair would then be able to reach over 70 percent of the US population, despite a rule limiting the combined reach of any single company’s stations to 39 percent.

Kushner-in-Law has openly bragged about cutting a deal with Sinclair, and this year that deal has paid off handsomely for Sinclair.  In April, the FCC voted to re-instate the “UHF discount” rule, a rule that was finally eliminated only last year.  Under that rule, the FCC counts only half the population reached by UHF stations when calculating the combined reach of all the stations owned by a licensee. For example, in the Los Angeles media market, which covers about 4.8 percent of the US population, a UHF station counts as reaching only 2.4 percent.

And that’s even worse than it sounds because, in the era of digital over-the-air TV, three out of four stations, commercial and non-commercial alike, are on the UHF band-- including many that identify over the air as VHF stations. Both WCBS-TV in New York and KCBS-TV in Los Angeles used to transmit their analog signals on channel 2, and both still identify themselves as channel 2, using channel 2 as their “virtual channel” (see link)-- though they now transmit their digital over-the-air signals on channels 33 and 43 respectively.

The use of VHF virtual channels with UHF transmitters is the rule these days. 53 of the 173 stations Sinclair already operates have VHF virtual channels, but only 27 actually operate in the VHF band. And of the 42 stations Tribune controls, 20 use VHF virtual channels, but only four transmit on VHF channels. The FCC will consider the 146 Sinclair stations and the 38 Tribune stations that operate in the UHF band (regardless of their virtual channels) as UHF stations for purposes of the UHF discount rule, counting only half those stations’ potential audiences when calculating the combined reach of all those stations. That should easily bring the total down to somewhere near 40 percent of the US population. And Ajit Pai, the former Verizon lobbyist Trump made his FCC chair, also plans to raise the limit from 39 to 45 percent, just to be safe.

That’s quite a reward for Sinclair’s support of Trump during the campaign!

The UHF discount should never have been revived. It was an indefensible anachronism long before the FCC eliminated it last year; in fact, it was obsolete even before it was first adopted in 1985. Consider the history of UHF.

When the UHF band was opened to TV in 1952, dozens of new UHF stations began operating. But few manufacturers equipped TV sets with UHF tuners, external UHF converter boxes were expensive and hard to find, and the quality of those UHF circuits was generally poor. And without a separate antenna designed for UHF, the results were usually disappointing. Viewers lost interest, and so did advertisers. Most of the UHF stations founded in the 1950s went broke within two years.

During the Fifties, some engineering improvements in UHF circuitry were made. But with few UHF stations on the air, few manufacturers were interested in using them.

Then the All-Channel Receiver Act of 1962 authorized the FCC to require that all TV sets shipped in interstate commerce be equipped to receive both VHF and UHF television. The FCC promptly adopted a regulation requiring not only all-channel receivers, but also setting a relatively high standard for the quality of the UHF circuits in order to make reception on both bands virtually equal. That regulation became effective in 1964.

Color TV also came of age in 1964, and leading manufacturers built the UHF tuners in color sets to even higher standards than those required by the FCC. New UHF stations struggled for the first few years, but by 1970 many independent UHF’s in mixed markets like Philadelphia were beginning to catch up with the long- established independent VHF’s in all-VHF markets like New York and L.A.

Then in the late Seventies, with the growth of cable TV, the last marginal disadvantages of UHF vanished, at least for cable subscribers.

So there was no justification for establishing the UHF discount in 1985, and there’s certainly no excuse for restoring it in 2017. The only reason it’s been brought back is to give the corrupt Trump Administration a way to reward a corporate lackey.

Local TV news-- with its sensationalized crime reporting, coverage of every fire and accident its crews can reach and mindless puff pieces planted by public relations professionals, is often a blight on journalism. But it’s still important, if only because 57 percent of Americans list it as their primary source of news.

And that’s why the reinstatement of an indefensible FCC rule-- for the sole purpose of allowing a rightwing outfit like Sinclair to insert their pro-GOP propaganda into the newscasts of more stations-- is alarming.

UPDATE: The Merger Lifts Sinclair from No. 4 to No.1 in Billings

Just how much will the Sinclair buyout of Tribune increase concentration? And what does that mean for profitability? Today’s edition of the online radio newsletter Tom Taylor Now explains that.

Sinclair will lead TV’s top groups by spot revenue-- though it’s still smaller than radio’s iHeartMedia

Just something to keep in mind when you scope out the latest “Top 30 Group Owners” in the TV field from TVNewsCheck-- radio’s largest group produces more revenue than any of them, even assuming Sinclair is able to scoop up Tribune. We’re used to iHeartMedia’s claims of having “the largest reach of any radio or television outlet in America” when it comes to listening/viewership. But there’s also the revenue angle. The radio/digital part of iHeart did $3.4 billion in revenue for 2016, up 3.6%% for the year. (That’s excluding its various outdoor divisions.) A merged Sinclair/Tribune would be $2.9 billion, and that’s enough to make it America’s top-billing TV station group. But it’s half a billion dollars smaller than iHeart Media. True, this NOW comparison is apples-to-tangerines or maybe grapefruit, since the TVNewsCheck chart is ranked by spot revenue, and iHeartMedia’s reporting total revenue, which would include digital and off-air. TV stations also benefit greatly from “re-trans” – retransmission fees paid by satellite and cable. While radio derives a much greater percentage of total revenue from spot sales. But it’s at least a rough guide to their relative size. With the caveat, let’s have some more fun.

Here are TV’s top-billing station groups, with a side-glance at radio – #1 on the TVNewsCheck roll call of TV groups, ranked by estimated 2016 spot revenues, is Sinclair/Tribune at $2.9 billion in spot revenue. (Adding Tribune Media lifts Sinclair from #4 to #1.) The #2-billing TV station group is CBS ($1.725 billion), and Fox is a very close #3 ($1.717 billion). #4 is Comcast/NBC ($1.48 billion) and Nexstar’s #5 at $1.249 billion. Okay, back to the parallel radio universe, for some very rough comparisons. The CBS Radio group reported $1.22 billion for last year, which is more than TV operator ABC-Disney’s $1.19 billion, Hearst’s $853 million and Univision’s $810 million. If you’re wondering how the future Entercom + CBS Radio would stack up, the annual revenue (disregarding possible divestitures) would’ve been about $1.7 billion last year. That’s close to the CBS-TV-owned stations and the Fox station group. See how the TV universe lays out with the TVNewsCheck Top 30 here. Revenue numbers are from BIA/Kelsey. Appraising the new position of Sinclair, its Dr. Mark Fratrik says “This is the first time in a long time-- maybe forever-- that a non [TV network] O&O is #1 in revenue.”
Note that these figures refer only to station spot sales revenues, not income from “re-trans” fees paid by cable and satellite-- and not to the other businesses of those corporations, e.g. networks (Fox, CBS, NBC, ABC, etc.), cable channels, or cable systems (Comcast).

And note, too, that Sinclair did not control the Tribune stations in 2016.  TVNewsCheck got some flack in the form of reader comments for misleadingly combining the two companies' earnings  instead of listing them separately (see the link in the second paragraph above).

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At 6:04 AM, Anonymous Anonymous said...

Brownshirts? check (see next article).

Goebbels reincarnate? check.

next up? big warmaking build-up? concentration camps? enabling acts? martial law?

At 8:56 AM, Blogger mainstreeter said...

I didn't know about the "UHF" sneaky pass. In Seattle and Portland Sinclair and tribune each own tv stations Reporters at KOMO in Seattle are complaining about the slant Sinclair has imposed on them since Fisher,the last locally owned broadcaster sold out to Sinclair

At 11:15 AM, Anonymous ap215 said...

Well thankfully Free Press took this to court & they blocked the FCC on the UHF along with Sinclair's "purchase" of Tribune hopefully it stays that way.

At 12:13 PM, Anonymous Jack Hannold said...

There's only a temporary stay on that rule change. The stay expires tomorrow, June 7, when a three-judge panel will hear arguments. And this will be in D. C. District Court, the most conservative District Court in the nation. So don't get your hopes up.


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