For decades, consumer advocates and media watchdogs have warned about the dangers of media consolidation and the nation’s obsession with often-mindless merger mania. And for just as long, many consumers and tech analysts ignored those warnings, clearly bored by concerns that such consolidation harms quality local reporting, competition, and quality discourse.
They’re paying attention now.
Sinclair’s planned $3.9 billion acquisition of Tribune would give it ownership of more than 230 broadcast stations, reaching 72 percent of the American public. Given that the broadcaster has been widely criticized for “news” that tends to be facts-optional on a good day, the company’s expansion efforts have seen renewed criticism in light of America’s disinformation problem.
This week, a new Deadspin report and video drove that point home, highlighting how the company demands that its local news anchors repeat factually-challenged, pro-Trump missives in relatively creepy nationwide unison:
Opposition to Sinclair’s blockbuster deal is bipartisan. Democrats argue the merger will allow a broadcaster with a tendency toward hyperbole to further mislead the American public. Republicans worry that the merger will have a profoundly negative impact on the ability of smaller news outlets to make inroads in a market already dominated by giants.
“A free and diverse press, a bedrock principle of American democracy, will be crippled by this proposed merger,” Conservative-leaning Newsmax said in a filing with the FCC opposing the deal (Newsmax’s CEO, Chris Ruddy, is a close Trump ally.)
“The level of media concentration proposed by this transaction will homogenize the content available to U.S. consumers, eliminate unique viewpoints, and reduce press diversity, especially in the delivery of local news,” Newsmax added.
In the wake of the viral video, Sinclair employees have also expressed their frustration with Sinclair’s messaging and management style, but note that the company structures employee contracts to severely financially penalize any employees that might consider leaving.
Despite the cacophony of opposition, FCC boss Ajit Pai has been undaunted in his efforts to kill off media consolidation rules exclusively to aid Sinclair’s expansion ambitions. Pai’s apparent coziness with Sinclair has been so blatant, it prompted a corruption investigation by Pai’s own bipartisan agency Inspector General, launched back in February.
In December, Pai’s FCC voted to eliminate a cap that prevents any one broadcaster from reaching more than 39% of the nation. Pai also made quick work of a 77-year-old rule that required broadcasters keep a local studio in the towns they service to encourage community participation, as well as rules preventing broadcasters from owning more than two TV stations and one radio station in the same market.
All of the rules have been used for decades to protect local news outlets and regional journalism from monopoly harm. But much like we saw during his extremely-unpopular net neutrality repeal, Pai isn’t moved by criticism or hard data, insisting that his policies are simply an attempt to modernize outdated regulations.
“The media ownership regulations of 2017 should match the media marketplace of 2017,” Pai proclaimed last year, adding that he was “dragging the broadcast rules into the digital age.”
"Every element of our media policy is custom-built for the business plan of Sinclair Broadcasting"
But consumer advocates, competitors, media watchdogs and Pai’s fellow Commissioners have been quick to point out that “old” rules don’t automatically equate to “bad” rules, and that Pai’s simply pandering to massive media and telecom monopolies (not exactly a new tactic for arguably one of the least popular individuals on the internet.)
“Every element of our media policy is custom-built for the business plan of Sinclair Broadcasting,” Democratic FCC Commissioner Jessica Rosenworcel told The Daily Beast last month. “That is stunning, it is striking, and it looks like something’s wrong. And I’m not the only one to think that. We’re burning down the values of media policy in this agency in order to service this company.”
Of course mindless mergers and acquisitions mania has been a bipartisan obsession for years, and much like the man that chose him to run the FCC, Pai is simply taking long-standing cronyism and revolving-door-regulation to the next level.
Time and time again, both parties tend to sign off on massive mergers, often applying only meaningless conditions that companies tend to ignore with limited repercussions. More often than not, said mergers result in higher prices and a litany of consumer harms, none of which get remembered by the time the next megadeal approval rolls around.
In this case, consumer advocates have already been warning that Sinclair hopes to dodge any remaining media consolidation limits by using partner shell companies to hoover up any remaining assets the government tries to prevent “Sinclair” proper from acquiring.
Deal critics hope that the FCC’s investigation forces Pai to recuse himself from the vote, or that hard data will somehow force Pai to reconsider approving the company’s megamerger when it comes up for a vote later this year. But given the FCC’s obvious disdain for hard data and the public welfare witnessed during the net neutrality repeal, you’d be hard-pressed to find many people willing to hold their breath.