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Sinclair says Tribune merger needed because of Instagram

Sinclair Broadcasting Group has asked the FCC to approve its controversial, multi-billion dollar merger with Tribune Media because of increased competition from Instagram and other online media providers.

In a July 5 pleading obtained by The Desk, Sinclair said it was necessary to merge with Tribune because a number of other media mergers coupled with new product launches have made the industry more competitive.

In the pleading, Sinclair cited Disney’s proposal to acquire assets away from 21st Century Fox and AT&T’s merger with Time Warner, the latter of which is still subject to judicial scrutiny after the Department of Justice announced on Thursday it would appeal an unfavorable lower court decision.

Sinclair also justified its need to merge with Tribune based on new features rolled out by Instagram earlier this month. Specifically, Sinclair cited Instagram’s new long-form video service that allows content creators to publish videos up to one hour in length. In the footnotes of the pleading, Sinclair linked to two news articles — one by Bloomberg, the other by the Wall Street Journal — outlining the new Instagram feature.

“If traditional MVPD giants are threatened by the emergence of and exponential growth of these new video competitors, imagine the impact on independent broadcasters,” Sinclair wrote, apparently referring to itself.

Sinclair said its acquisition of Tribune “will neither violate any FCC rules or policies nor impede viewers’ access to high-quality local news and information programming.” Critics have argued that Sinclair is exploiting several loopholes, including one called the UHF discount and another arrangement called a joint marketing agreement, to avoid caps on the number of stations that one company can own under FCC rules.

In a filing with the FCC on Thursday, the American Cable Association said Sinclair should be prevented from exercising any control over stations divested as part of the Tribune merger, which would effectively prevent the company from entering into joint market agreements after the fact.

“We simply ask that the Commission confirm that Sinclair cannot lawfully acquire or control the stations in question, even if they are transferred immediately upon closing,” the ACA’s filing said.

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About the Author:

Matthew Keys

Matthew Keys is a nationally-recognized, award-winning journalist who has covered the business of media, technology, radio and television for more than 10 years. He is the publisher of The Desk and contributes to Know Techie, Digital Content Next and StreamTV Insider. He previously worked for Thomson Reuters, the Walt Disney Company, McNaughton Newspapers and Tribune Broadcasting.
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