Sinclair/Allbritton OK, With Divestiture, DoJ Says
Sinclair and Allbritton Communications will have to sell their interests in WHTM-TV Harrisburg, Pennsylvania, to Media General to proceed with their $963 million deal, said the U.S. Department of Justice in a consent decree filed in U.S. District Court in Washington, D.C. “Without the required divestiture, prices for broadcast television spot advertising would likely increase in parts of central Pennsylvania,” said DOJ in a news release Tuesday (http://1.usa.gov/U87NN5). The divestiture requirement echoes a plan to sell WHTM to Media General announced by Sinclair last month (CD June 24 p16). In a May letter to the Media Bureau, Sinclair said its plan to buy Allbritton’s TV stations must be completed by July 27 to remain viable, because the purchase agreement allows either party to terminate it July 28 (CD May 30 p1).
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DOJ’s Antitrust Division and the Pennsylvania Office of Attorney General filed a complaint blocking Sinclair’s deal to buy Perpetual (of which Allbritton is a subsidiary) Tuesday, along with documents announcing the proposed consent decree. The filing kicks off a 60-day public comment period, which will end with the federal court deciding whether to accept the consent decree, a DOJ spokesman told us. The FCC, which also must approve the transaction, is not a party to the DOJ deal, an FCC official told us.
It’s typical for the commission to wait for DOJ to rule on a transaction before issuing its own ruling, said Free Press Policy Counsel Lauren Wilson. Free Press has filed multiple comments opposing Allbritton/Sinclair. “We can probably expect something from the FCC soon,” she said.
Sinclair/Allbritton would “lessen competition” in broadcast-TV spot ads in Pennsylvania’s Harrisburg-Lancaster-Lebanon-York designated market area, said the DOJ filings. “As a result of the acquisition, Sinclair would own or control three of the six broadcast television stations selling advertising in the area, and advertisers could be forced to accept price increases due to the loss of competition,” said the DOJ release. Similar competitive harms would not result from other aspects of the deal in Charleston, South Carolina, where Sinclair operates a station through a sharing agreement with Cunningham Broadcasting, DOJ said.
Though Sinclair’s WCIV-TV Charleston and Cunningham’s WTAT Charleston are owned by separate companies involved in a shared service agreement, DOJ treated their relationship as a merger during their review. Wilson said that is a positive development for opponents of broadcast sharing arrangements. But DOJ said it concluded that “even a full merger would not likely result in a substantial lessening of competition.”
Sinclair previously said it would let WCIV “go dark” to comply with FCC rules on transactions involving sharing arrangements (CD May 30 p1) and have the Allbritton deal approved by the July 27 deadline. When it announced the Media General deal, Sinclair said it expected the Allbritton deal to be completed and approved by Q3.
The FCC review of the deal may not come to the same conclusions as DOJ, because the commission’s public interest standard for such transactions is more broad, said Andrew Schwartzman, senior counselor at Georgetown Law’s Institute for Public Representation. The commission should “pay attention” to the way DOJ treats sharing arrangements, he said. The Media Bureau and Sinclair had no comment. -- Monty Tayloe (mtayloe@warren-news.com)