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.
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.
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.