Sinclair, Tribune, Others Reach Consent Decree With DOJ on Sharing Ad-Sales Data
Sinclair, Tribune and several other broadcasters agreed on a consent decree with DOJ connected with an investigation into sharing advertising sales “pacing” information, according to Sinclair, Tribune, broadcast attorneys and a Justice official. The department is expected to file the settlement in court Thursday, Sinclair said. The consent decree will resolve the DOJ investigation, Sinclair said.
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Sinclair and Tribune said the settlement doesn’t involve monetary damages or penalties. The DOJ official confirmed the broadcasters’ characterization of the consent decree. A DOJ investigation into Sinclair and Tribune on sharing information was first reported as the broadcasters’ deal was dissolving. Sinclair and DOJ didn't confirm that this settlement relates to that reported investigation. Numerous broadcast attorneys believe this to be the same matter. Antitrust lawsuits based on reports of the DOJ probe were filed by advertisers against Sinclair, Gray, Nexstar and Tegna (see 1810050041). It’s not clear which broadcasters are part of the consent decree, and some companies targeted by DOJ could elect to litigate instead of agreeing to the settlement, lawyers told us.
The settlement doesn’t include “admission of wrongdoing” and Sinclair believes the information sharing didn’t violate any rules and had “no actual impact” on ad prices, said Sinclair CEO Chris Ripley on the company’s Q3 earnings call Wednesday. “We’re pleased to put the distraction of this issue behind us in a way that has no operational effect,” emailed a Tribune spokesperson. “The consent decree, which involves neither an admission of culpability nor a monetary penalty, prohibits the sharing of certain information with our competitors in a manner consistent with existing Tribune policy.” Ripley said agreeing to the settlement and accompanying compliance plan involved minimal costs to Sinclair, compared with likely costs of litigation.
Sales pacing data concerns “this year’s performance over last year,” emailed a Sinclair spokesperson. Competitors can't share insider information that could be used for anticompetitive practices, a broadcast industry official noted. Lack of monetary penalty suggests any perceived violations by the broadcasters were minimal, lawyers said.
It's the biggest ever midterm political ad year in Sinclair’s history, with revenue 20 percent higher than for the 2016 presidential election and 60 percent higher than the last midterm in 2014, Ripley said. The political ad spending beat every other presidential election year other than 2012, Ripley said. The high spending is an indication of “robust” political ad revenue for the 2020 presidential election year.
The company doesn’t expect much FCC action on the national broadcast ownership cap, Ripley said. There's “a lack of unanimity” in broadcasting that’s making it difficult for the FCC to move forward on the matter, he said. It’s not clear what will come out of the agency’s expected 2018 quadrennial review, Ripley said. The lack of an administrative law judge decision on the order designating Sinclair/Tribune for hearing “has not affected our conversations in the marketplace,” Ripley said, saying the company is still ready to “move forward” on dealmaking opportunities.
ATSC 3.0 is expected to roll out in 20 to 30 more markets in 2019 -- “a third of our portfolio,” Ripley said. Broadcasters are aiming for full nationwide coverage by 2020, he said. “The vast majority of the industry is behind this.” The first mobile chip set for 3.0 will be showcased at CES in January, he said.