WASHINGTON—The American Television Alliance (ATVA) has submitted a letter to the Federal Communications Commission (arguing that broadcasters are using loopholes to evade meaningful agency review of broadcast transactions.

ATVA is backed by pay TV providers and associations.

In the filing, ATVA said that under the 1996 Telecom Act, the FCC is required to review transactions involving television stations to ensure they serve the public interest.

ATVA also noted that the commission must evaluate potential harms to consumers and local communities, including higher prices, reduced competition and diminished local news coverage when a broadcast station group owner tries to combine two or more major national broadcast network affiliations within a single market.

Increasingly, however, ATVA noted that broadcasters are exploiting loopholes to sidestep reviews.

ATVA’s filing contends, for example, that Sinclair is using “affiliation swaps” loopholes to avoid reviews.

Rather than directly acquiring a competing station with a major network affiliation, ATVA cited examples of where Sinclair first acquired that station’s network programming rights—such as ABC content—a transaction that does not trigger the review process.

It can then place that programming on a secondary digital “multicast” channel of a station it already owns, temporarily carrying, for example, both CBS and ABC programming under a single broadcast license.

Then, ATVA argued, Sinclair submitted an application to acquire the now stripped-down station itself. Because the second station no longer carries a “Big Four” network at the time of the sale, the resulting transaction appears less significant on paper and often receives only a cursory review. After the deal is approved, Sinclair can then shift the ABC programming back to the newly acquired station, the ATVA contended.

“Sinclair’s recently approved transactions demonstrate how broadcasters use affiliation swaps or changes to consolidate within local markets while avoiding Commission review or public comment,” the letter said. “The Commission should put an end to these practices. It should modify its rules in order to ensure proper oversight over such transactions, and to limit the increasingly widespread consolidation in the television marketplace.”

ATVA also stressed that Sinclair CEO Chris Ripley told Wall Street analysts during an April 30 first-quarter earnings call that duopolies, or “double-ups,” are core to Sinclair’s strategy due to their inherent operating efficiencies.

ATVA made the filing as part of the quadrennial regulatory review.

WASHINGTON, D.C.—The FCC has issued a Memorandum and Order approving a deal between Gray Television and Marquee Broadcasting that would transfer station licenses to Marquee and transfer an unbuilt construction permit from Marquee to Gray.

The application was unopposed. The FCC ruling will allow Marquee to own two top-four network affiliations in the Cheyenne-Scottsbluff Nielsen Designated Market Area. The Local Television Ownership Rule generally prohibits top-four combinations in a market, including the transfer or assignment of ownership of multiple top-four affiliated program streams serving a single DMA.  

The FCC ruled, however, that Marquee should be an exemption because the small market would have made it difficult to provide local news without the exemption. 

After Gray and Marquee signed an Asset Purchase Agreement dated January 30, 2024, the station groups filed applications with the FCC for assignment of certain licenses from Gray to Marquee Broadcasting West, Inc. and, in exchange, to assign an unbuilt construction permit from Marquee to Gray 

As part of that agreement, Gray sought to acquire the construction permit for KCBU(TV), Price, Utah (KCBU) from Marquee and transfer the licenses of television stations KCWY-DT, Casper, Wyoming (KCWY) in the Casper-Riverton DMA; KGWN-TV, Cheyenne, Wyoming (KGWN) and KSTF(TV), Scottsbluff, Nebraska (KSTF) in the Cheyenne-Scottsbluff DMA; and KNEP(TV), Sidney, Nebraska (KNEP) in the Denver DMA; and the related low-power stations to Marquee. 

The applicants assert that the digital noise-limited service contours of KGWN and KSTF in the Cheyenne-Scottsbluff market do not overlap. The agreement would, however, give Marquee ownership of KGWN, which currently has two top-four rated network affiliations on its programming streams in the Cheyenne-Scottsbluff DMA.  

The applicants noted that prior to the transfer, Gray provided over-the-air service throughout the Cheyenne-Scottsbluff DMA through KGWN, which primarily serves Cheyenne, Wyoming, and semi-satellite stations KSTF and KNEP, which serve the Scottsbluff, Nebraska, area. These stations provide 17 hours of local news per week, as well as CBS and NBC network programming.

Gray and Marquee argued that Gray could not sustain the current level of local service to Cheyenne-Scottsbluff viewers for the long term, and that Marquee can maintain and improve KGWN’s local service only if the CBS and NBC affiliations remain intact.

They also stressed that the Cheyenne-Scottsbluff DMA only has 61,010 television households spread thinly over 5,665 square miles and ranking 196th of 210 DMAs in the country, making it a geographically large, but sparsely populated, market covering portions of Wyoming and Nebraska.

In approving the deal, the FCC noted that “the Commission’s Local Television Ownership Rule prohibits, among other things, the transfer or assignment of ownership of multiple top-four rated program streams serving a single DMA.  Upon request, however, we consider case-by-case showings that application of the Top-Four Prohibition is not in the public interest due to specific circumstances in a local market or with respect to a specific transaction.”

After reviewing the filings, the FCC concluded that “The record demonstrates that permitting Marquee to acquire KGWN with both top-four network affiliations intact makes it more likely that Marquee would preserve the service that Gray currently provides in the Cheyenne-Scottsbluff DMA, which would serve the public interest.  KGWN, as the CBS and NBC affiliate in the market, provides the only locally produced television news programming in the market, and in 2023 and early 2024, Gray aired 17 hours of local news each week across the two network streams.  The evidence in the record demonstrates that splitting up the top-four network affiliations currently on KGWN would likely lead to a reduction in network programming or local news in the Cheyenne-Scottsbluff DMA, which would not serve the public interest. We conclude that the public interest harms of Marquee’s proposed ownership of KGWN with the two top-four affiliations intact are outweighed by the unrebutted record evidence of the public interest benefits of this transaction.”

The full ruling can be found here. 

CINCINNATI –Cordillera Communications has announced the sale of 15 of 16 of its TV stations to the E.W. Scripps Company and the 16th Tucson station to Quincy Media, Inc. The deal marks the exit of the St. Paul, Minn.-based station group–which is owned by Charleston, S.C. company Evening Post Industries–from the broadcasting business. Cordillera had announced in August that it had planned to sell its stations. The deal, which is expected to close in the first quarter of 2019 is valued at $521, and subject to federal regulatory approvals.

The acquisitions in 10 markets grows the Scripps local television station footprint to 51 stations in 36 markets with a reach of nearly 21 percent of U.S. TV households. Scripps is not buying Cordillera’s remaining station–NBC affiliate KVOA-TV in Tucson, Ariz.– because Scripps already operates a duopoly in that market. There are no other overlapping markets.

All but one of the acquired stations rank No. 1 in their markets. It also adds depth to its local media footprint through the addition of three duopolies-–in Helena and Great Falls, Montana, and Corpus Christi, Texas, according to Scripps.

The stations also diversify Scripps’ affiliate relationships, adding more NBC and CBS stations to Scripps’ strong ABC roster.

“Through this transaction, Scripps will operate the No. 1-rated TV stations in a third of its markets, enhancing the durability of our portfolio,” said Brian Lawlor, president of the Local Media division of Scripps. “The acquisition also allows us to go deeper in new markets with the addition of three new duopolies, including two with Big Four combinations.”

After the acquisition, Scripps will have the No. 1 Nielsen-rated TV stations in 11 of its 36 markets with 18 ABC stations, 11 NBC stations, seven CBS stations and two Fox stations. Scripps will operate seven duopolies.

The stations Scripps is acquiring are:

• WLEX, the NBC affiliate in Lexington, Kentucky
• KOAA, the NBC affiliate in Colorado Springs, Colorado
• KATC, the ABC affiliate in Lafayette, Louisiana
• KSBY, the NBC affiliate in Santa Barbara-San Luis Obispo, California
• KRIS, the NBC affiliate, and KAJA, a Telemundo affiliate, in Corpus Christi, Texas
• KPAX and KAJJ, a CBS affiliate in Missoula, Montana
• KTVQ, a CBS affiliate in Billings, Montana
• KXLF/KBZK, the CBS affiliate in Butte-Bozeman, Montana
• KRTV, the CBS affiliate, and KTGF, the NBC affiliate, in Great Falls, Montana
• KTVH, the NBC affiliate, and KXLH, the CBS affiliate, in Helena, Montana

The 10 Cordillera markets have about 700 employees.

“Our stations are as strong as they’ve been across any point in our 32-year history,” said Terry Hurley, president of Cordillera. “We’ve had a good run, and we’re proud of how our stations have excelled over the years. We’re also heartened to know they’ll continue to be in exceptional hands.”

The company had indicated that it was exiting the broadcast business following the spectrum auctions in 2017, which it said “generated significant interest from established parties throughout the country”

“The two buyers represent the best possible scenario: They are poised to grow the stations and empower them to compete in this changing media landscape, and, more importantly, they will provide a great home and opportunities for the dedicated employees of Cordillera,” Hurley said.

Methuselah Advisors acted as financial advisor.