Nexstar, Sinclair Consortium to Aggregate Spectrum, Looking to ATSC 3.0
Nexstar Media and Sinclair agreed to create a consortium designed to let broadcasters compete with wireless companies using both ATSC 3.0 and current broadcast advertising, said a news release from the TV station owners and broadcast executives in interviews. The consortium, which “will promote spectrum aggregation, innovation and monetization,” will be jointly owned and controlled by Sinclair and Nexstar, the firms said. It's “non-exclusive” and the consortium “is intent on exploring the inclusion of other television broadcasting entities,” they said.
This is intended to bring TV stations together to offer a national footprint for both the wireless spectrum uses promised by the new TV standard and broadcast advertising, said Sinclair Vice President-Advanced Technology Mark Aitken. The goal is to “lash together” broadcasters to create a national presence, Aitken said.
The release says promoting “spectrum utilization” is a goal of the consortium. Executive Vice President Jerald Fritz of Sinclair's ONE Media said the best way to get the most value out of the broadcast spectrum is to package it all together to offer a national footprint (see 1702220056) for data services. This will be one function of the consortium, Aitken said. Aside from 3.0, the consortium is intended to allow the companies to offer ad buys that reach further, he said. A national ad buy, as large pay-TV companies can offer, is more attractive to Madison Avenue, Aitken said. “We believe this effort will maximize the value of our programming and ad inventory while creating new cross platform revenue opportunities that will benefit our respective shareholders,” said Sinclair CEO Chris Ripley in the release.
The consortium's goal is to have a national footprint, Aitken said. “If you look at wireless companies as our competition, you need coast-to-coast availability.” Together, Sinclair and Nexstar reach 60 percent of the country, and Aitken said they would be amenable to another large broadcaster joining them as an owner of the consortium to increase its footprint. Smaller broadcasters will be able to participate in the consortium but not at the controlling level occupied by Sinclair and Nexstar, a broadcast official said. “We welcome the involvement of other broadcasters who share our enthusiasm for the new technology which will allow our industry to continue to thrive in today’s multi-platform world,” said Nexstar. The footprint could also grow if media ownership regulations are loosened, as is widely anticipated.
The founding firms intend to enhance broadcaster data-gathering capabilities. Nexstar and Sinclair “expect to capture significant and meaningful information relating to consumers’ actual viewing and consumption behaviors,” they said. “For advertisers, it will provide greater efficiency for their spend with elevated addressability, personalization and accountability.” They said “broadcasters will realize greater efficiencies in reaching and monetizing a significantly larger advertising market.”
A broadcast executive said the companies don’t believe the consortium raises antitrust issues. However, an antitrust attorney said an antitrust case could be made if it can be shown the companies are cooperating on business opportunities they would usually be in competition for, such as local ad sales. A likely counter-argument would be that without cooperating, the two broadcasters wouldn’t have access to the opportunities provided by a nationwide footprint, and thus the consortium isn’t reducing competition, the lawyer said. An FCBA panel on ATSC 3.0 also discussed possible antitrust issues (see 1702220056).
“Our collaborative initiative will ensure that Sinclair, Nexstar and perhaps other industry participants are out of the blocks quickly once ATSC 3.0 is launched,” Ripley said in the release.