NPI's Cascadia Advocate

Offering commentary and analysis from Washington, Oregon, and Idaho, The Cascadia Advocate is the Northwest Progressive Institute's unconventional perspective on world, national, and local politics.

Thursday, April 11th, 2013

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.

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One Comment

  1. I see very few changes at the out­set. The Fish­er Group seemed to present a rel­a­tive­ly Con­ser­v­a­tive view in the first place.

    # by Mike Barer :: April 12th, 2013 at 6:24 AM