UHF Discount Restoration ‘Reasonable First Step’ in Broadcast Rules Revamp, Says Sinclair CEO
Sinclair sees the recent FCC vote to restore the UHF discount (see 1704200048) as “a reasonable first step in bringing antiquated broadcast rules in line with the realities of today’s diverse media landscape,” CEO Chris Ripley said on a Wednesday earnings call. “Further modernization of the broadcast regulations will benefit consumers through economies of scale that allow broadcasters to invest more in local news and quality local programming," he said.
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Sinclair is “very pleased” with its $240 million acquisition of 14-station Bonten Media (see 1704210051), said Ripley in Q&A. “Longer-term, we’re going to be able to add benefits to those stations because of our scale.” The Bonten buy typifies “many more opportunities to come” in mergers and acquisitions, now that “we’re coming off a period of extreme restrictions when it comes to M&A,” Ripley said. “The FCC was very restrictive. The auction prevented people from even talking. All that is starting to loosen up here. The auction is over. The UHF discount’s back."
Ripley thinks the prospects for additional deregulation at the FCC "are very high later on this year, and we’re already hearing about people re-evaluating where they are and whether they should be hitting the market as it opens up here," he said. "We think it’s a buyer’s market, and that’s why we loaded up the balance sheet.” Sinclair estimates it has about $3 billion to $4 billion of “acquisition capacity" on the books, Chief Financial Officer Lucy Rutishauser said in Q&A. The company is “really just focused at the end of the day on doing accretive transactions,” said Ripley.
Sinclair remains “very busy” on the ATSC 3.0 “front,” having recently announced agreements with Saankhya Labs to speed development of receiver chipsets (see the March 29 issue of this publication) and with Nexstar Media to form a consortium that will explore “monetization” of ATSC 3.0 broadcaster “opportunities” (see 1703150067), said Ripley. Sinclair also is launching its ATSC 3.0 “beta test” in Washington and Baltimore “towards developing enhanced content, targeted advertising and mobile distribution,” he said.