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Sinclair points to convergence, media M&A boom in defense of Tribune deal

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Sinclair points to convergence, media M&A boom in defense of Tribune deal

Sinclair Broadcast Group Inc. and Tribune Media Co. cited AT&T Inc.'s acquisition of Time Warner Inc. and increasing competition in the media landscape from tech companies in the broadcasters' latest arguments for their proposed combination.

In a July 5 filing with the U.S. Federal Communications Commission, Sinclair and Tribune said outside opposition to the deal was rooted in outdated modes of thinking about the media landscape and "subjective disagreement with content that airs on Sinclair stations."

The broadcasters pointed to the recent ruling in the antitrust case against AT&T's acquisition of Time Warner, saying the judge's decision to allow the deal recognized that traditional pay TV providers are now competing with Alphabet Inc., Facebook Inc. and Netflix Inc. Broadcasters "compete with these same new entrants, in addition to rapidly consolidating cable and satellite providers," Sinclair and Tribune said.

If traditional pay TV giants are threatened by these new video competitors, "Imagine the impact on independent broadcasters … who rely on the same eyeballs for ratings and ad revenues to acquire increasingly expensive content and to produce local programming," they said in the filing.

Sinclair also said opponents to the Tribune deal do not like Sinclair content for "subjective" reasons. Opponents have argued that Sinclair management has a history of dictating a top-down, partisan approach to news coverage. A commonly cited example is the short commentary programs, which Sinclair requires local stations to run during local news segments. One such program is often hosted by former Trump aide Boris Epshteyn.

Sinclair said in its July 5 filing that "by focusing on selected short commentaries and internally syndicated programming," opponents of the Tribune deal are trying "to paint an inaccurate and misleading picture of Sinclair as a company that runs all of its stations from a single national command center."

A coalition of companies has asked the FCC to block the merger, arguing that the combination would hurt localism and diversity. The coalition also argued a combined Sinclair and Tribune would be able to demand higher retransmission consent prices, driving up cable bills for consumers and leaving distributors with a smaller programming budget to spend on carrying independent networks.

Members of the coalition include industry groups such as the American Cable Association, Competitive Carriers Association, NTCA—The Rural Broadband Association and the Computer and Communications Industry Association; the satellite TV company DISH Network Corp.; independent cable networks and a number of public interest groups, including the Sports Fans Coalition, Latino Victory Project and Public Knowledge.

The FCC stopped the 180-day shot clock for the review of Sinclair/Tribune transaction earlier this year as the agency gathered more information and comments about the deal. Only 13 days remain on the clock once it starts moving again. It likely will not restart before July 12, when comments are due on the latest version of the deal, Broadcasting & Cable reported July 5.