Sinclair, Inc. this week filed an application with the Federal Communications Commission (FCC) seeking permission to acquire a CW Network affiliate in Flint, Michigan, The Desk has learned.
The proposed deal involves WBSF (Channel 46), which is currently licensed to Cunningham Broadcasting and operated by Sinclair through a local marketing agreement. Those agreements allow broadcasters like Sinclair to control a local TV station that is licensed on paper to another company; Sinclair operates most of Cunningham’s local stations across the country.
Like other broadcasters, Sinclair has taken advantage of relaxed regulatory enforcement at the federal level to engage in station swaps and acquisitions.
But the move in Flint is more unusual because it would allow Sinclair to have direct control over three television stations in the same community, something that the FCC has historically frowned upon, except in extraordinary circumstances. In this case, Sinclair already owns WEYI (Channel 25) and WSMH (Channel 66, Fox and NBC), which are licensed to different cities but transmit to the same part of the state.
The FCC’s Media Bureau has allowed companies to acquire more than two stations in markets where at least one of those outlets is considered to be “failing” on the likelihood that it might go off the air if not for a bigger company coming in to rescue it. Documents reviewed by The Desk did not indicate whether Sinclair was planning to argue a failed station status for WBSF.
The application is one of the first filed since the FCC voted last week to eliminate its long-standing limitation on the number of broadcast TV stations a company may directly own. Under its prior rule, companies were not allowed to amass a collection of licenses for stations that reached more than 39 percent of the American viewing audience.
FCC Chairman Brendan Carr previously voiced his support for eliminating the ownership cap, and was one of two commissioners to vote in favor of repealing the rule last week. (Carr and the other, Olivia Trusty, are Republicans.)
The removal of the ownership cap is almost certain to invite legal challenges once it is published in the Federal Registrar, which is expected to occur next month. In a phone interview on Tuesday, Newsmax CEO Christopher Ruddy said his network is preparing to file a lawsuit on the matter.
During a conference call with investors last week, Sinclair CEO Christopher Ripley said he welcomed the FCC’s vote on the ownership cap, calling it a move that “the industry has been supporting for many years.”
“The removal of the national ownership cap would set the stage for broadcasters to be able to compete on a more level playing field as the industry finds itself competing against big tech and streamers that are not subjected to comparable regulatory constraints,” Ripley said during the call, which came one day before the FCC’s vote. “It would strengthen broadcaster’s ability to invest in local news across the country as we continue to serve our local communities.”
Ripley affirmed the elimination of the ownership cap, coupled with the easing of other regulatory burdens, was influencing Sinclair’s thinking when it came to potential mergers and acquisitions.
“Sinclair is well prepared to participate in value-creating consolidation, and we will remain disciplined in how and when we do so,” Ripley said.
