Bad news for the Pacific Northwest: KOMO owner Fisher agrees to sell itself to Sinclair

And just like that, anoth­er local insti­tu­tion is gone.

Fish­er Com­mu­ni­ca­tions, one of the last inde­pen­dent­ly-owned media com­pa­nies in the Pacif­ic North­west, has decid­ed to sell itself to an out of state, right wing media con­glom­er­ate for $373 mil­lion, the com­pa­ny announced today.

“After con­duct­ing our review of poten­tial strate­gic alter­na­tives, the Board con­clud­ed this all-cash trans­ac­tion was the best path to max­i­miz­ing val­ue for share­hold­ers,” said Paul A. Bible, Chair­man of Fish­er’s Board of Direc­tors, in a statement.

“Sin­clair is the largest inde­pen­dent TV broad­cast­er in the coun­try, and we believe its com­mit­ment to the indus­try — along with its greater scale and siz­able resources — will pro­vide our sta­tions, team mem­bers and busi­ness part­ners with new oppor­tu­ni­ties to flour­ish,” said Colleen B. Brown, Fish­er’s Pres­i­dent and CEO.

We dis­agree. Fish­er’s deci­sion to sell itself is bad news for our region, bad news for media diver­si­ty, and bad news for all who care about good journalism.

Sin­clair Broad­cast Group is the media con­glom­er­ate that made a name for itself (in a bad way) dur­ing the 2004 pres­i­den­tial cam­paign when it became known that it was forc­ing its local sta­tions to air an anti-John Ker­ry “doc­u­men­tary” called “Stolen Hon­or” on the eve of the elec­tion. This prompt­ed a fierce back­lash and a “Stop Sin­clair/Boy­cott Sin­clair” cam­paign, which took a seri­ous toll on Sin­clair’s stock.

(We cov­ered this on The Advo­cate back in Octo­ber of 2004).

Though nowhere near as huge as Dis­ney, Via­com, CBS, Com­cast’s NBC Uni­ver­sal, or Rupert Mur­doch’s News Cor­po­ra­tion, it is still a big com­pa­ny — it’s the largest own­er of local tele­vi­sion sta­tions in the Unit­ed States. Its port­fo­lio already con­sists of some eighty-sev­en sta­tions in near­ly fifty media markets.

Late­ly, Sin­clair has been on a buy­ing spree. Only a cou­ple of months ago, it reached an agree­ment with KIRO7 own­er Cox Com­mu­ni­ca­tions to buy four of their sta­tions. And last year it bought six sta­tions from New­port Tele­vi­sion. Pri­or to that, it bought eight tele­vi­sion sta­tions from Free­dom Com­mu­ni­ca­tions in 2011.

A com­menter on the blog TVNewsCheck, react­ing to the news of Fish­er’s sale to Sin­clair, asks a good ques­tion: Where is Sin­clair going to find the mon­ey to run all of these sta­tions that it is gob­bling up?

We are now see­ing a total lack of respon­si­bil­i­ty in broad­cast­ing: Accord­ing to a March 12 reg­u­la­to­ry fil­ing, Sin­clair Broad­cast Group had $2.27 bil­lion in debt (as of Dec. 31) and is seek­ing near­ly $1 bil­lion in loans to refi­nance exist­ing debt and sup­port the recent acqui­si­tions of Bar­ring­ton Broad­cast­ing Group and cer­tain Cox Media Group stations.

Accord­ing to Bloomberg, the com­pa­ny is also sell­ing $600 mil­lion of bonds to pay down exist­ing debt. In the past two years, Sin­clair has spent rough­ly $1.5 bil­lion… buy­ing Free­dom on cred­it for $385 mil­lion, Four Points for $200 mil­lion, New­port for $467 mil­lion, and, most recent­ly, Bar­ring­ton for $370 mil­lion and four Cox sta­tions for $99 mil­lion. It has also been report­ed that Sin­clair is try­ing to buy Titan Tele­vi­sion Broad­cast Group and its 12 mid-to-small-mar­ket sta­tions. Trans­la­tion: Sin­clair con­tin­ues to buy tele­vi­sion sta­tions with mon­ey it does­n’t have. How much cash will Sin­clair have to oper­ate and improve these sta­tions they are gob­bling up? How does this help pre­serve the voice of local braod­cast? It doesn’t.

Colleen Brown claims that Sin­clair’s “greater scale” and “siz­able resources” will allow the sta­tions she’s cur­rent­ly run­ning to flour­ish. That’s a load of cor­po­rate mum­bo-jum­bo. Exec­u­tives attempt­ing to jus­ti­fy a zil­lion past merg­ers and acqui­si­tions have made sim­i­lar claims using sim­i­lar buzzwords.

Cor­po­rate merg­ers fail more often that mar­riages, as CNN report­ed in 2009. A 1999 study by account­ing giant KPMG (PDF) found that eighty-per­cent of merg­ers “failed to unlock val­ue”. What’s more, half of the merg­ers exam­ined destroyed val­ue.

The sales agree­ment announced today is bad news for the Pacif­ic North­west. Fish­er’s stock­hold­ers will get a pay­out and Sin­clair’s exec­u­tives will take over their assets. The rest of us get noth­ing out of this — in fact, we stand to lose a lot.

This is a deal only the one per­cent could love.

Fish­er’s investors will be com­pen­sat­ed for their shares by Sin­clair with mon­ey we pre­sume Sin­clair does­n’t even have, giv­en its recent reg­u­la­to­ry filings.

And then a long list of tele­vi­sion and radio sta­tions that used to be local­ly owned will become cogs in yet anoth­er out of state media con­glom­er­ate’s empire.

As Jon Tal­ton says:

Broad­cast­ing, which uses the pub­lic air­ways, has become one of the most con­sol­i­dat­ed indus­tries in our era of monop­o­lies, duop­o­lies and car­tels. All across the coun­try, for­mer­ly proud local sta­tions have been absorbed by the Borg of a few big players.

The Fed­er­al Com­mu­ni­ca­tions Com­mis­sion has done noth­ing to stop the trend, so don’t expect it to stop the sale of Fish­er. But the result is not just lost jobs, but the loss in com­mu­ni­ties of some of their most impor­tant, and influ­en­tial, touch­stones. There’s less com­pe­ti­tion and inno­va­tion, few­er choic­es and dis­tinc­tive local stations.

We’ll have more on this lat­er today. Stay tuned.