ATSC 3.0 Consortium Has 'Ton' of Prospective Members, Says Sinclair CEO
The broadcaster spectrum consortium based on ATSC 3.0 started by Sinclair and Nexstar is accepting new member groups as both “affiliates” and “founders” and is in negotiations with “a ton” of prospective member groups, said Sinclair CEO Chris Ripley at a Media Institute event Tuesday.
“The difference between an affiliate and a founder is really just size,” Ripley said, saying the consortium has term sheets out to numerous prospective member broadcasters. Univision joined earlier this month as a founding member (see 1706010079), and its first affiliate member Northwest Broadcasting joined last week (see 1706140066). A condition of membership is the member will broadcast ATSC 3.0, and the consortium is expected to focus on collectively monetizing the new standard, Sinclair said.
The consortium will be a “bridge” to help create the collaboration among broadcasters that will be necessary for ATSC 3.0 to proceed, Ripley said. He conceded lack of backward compatibility with ATSC 1.0 and the transition to the new standard are its biggest hurdles, and said the standard would “roll out” regardless of Sinclair’s actions. The new standard is likely to lead to uses that broadcasters haven’t anticipated, Ripley said. For example, 3.0 has been tested as a venue to provide three dimensional maps to autonomous cars, an application Sinclair “didn’t even know existed until six months ago,” Ripley said.
Buying Tribune will facilitate the transition to the new standard by increasing Sinclair’s footprint, Ripley said, and he expects the deal to be complete around the end of 2017. Though Sinclair and Tribune overlap in 14 markets, Ripley said “there’s no competitive reason” for the combination to divest stations in any of those markets, though he conceded that by “the strict standard” historically used by antitrust regulators some divestitures could be required. The most likely markets for such divestitures are St. Louis, Salt Lake City and Wilkes-Barre, Pennsylvania, Ripley said. The rest of the markets involved in the deal “are right on the edge,” Ripley said, though he also said no divestitures would be required if DOJ considered cable an advertising competitor for broadcasters. The same ads are often run on MVPDs and the Internet as on broadcast stations, Ripley said. Critics of the deal are concerned it will reduce broadcast voices (see 1706130065).
The Tribune deal and other industry consolidation are “commercially inevitable” because the broadcast industry would otherwise cease to exist in the face of vast competitors such as AT&T, Amazon and Comcast, Ripley said. Broadcasting is a “pimple” compared with the large media competitors it faces, he said. In “the ecosystem we play in,” Sinclair is the “shortest of everyone at the table,” Ripley said. That disparity is why FCC media ownership rules should be rolled back, he said. “There’s no other industry regulated by the FCC that has a national cap.”
After the Tribune deal, Sinclair likely will launch more broadcast networks, Ripley said, including an “overlay network” intended to get the most out of the content Sinclair provides its stations. Sinclair doesn’t intend for its broadcast networks to compete with the big four networks, he said. "The affiliate business is going to continue to be an important business for us.” Local news is one of Sinclair’s most dependable businesses, he said. Ripley disputed that Sinclair’s content is affected by political bias. “It’s no secret some of our shareholders have a conservative bent,” he said. “That doesn’t define who Sinclair is as a broadcaster.“ The company is about broad appeal, he said: “If we were as slanted as we're accused, we would suffer financially.”