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WSJ: Sinclair Broadcast Group’s Sidecar Agreements Draw Scrutiny

sinclair logoThe Wall Street Journal takes a long look (subscription required) at Sinclair Broadcast Group’s continued expansion, specifically the use of sidecar agreements — which allow companies to manage stations it doesn’t own — as a way to bypass FCC ownership rules.

Sinclair says such agreements are vital in competing against the Web and other new suitors for viewer attention. “It’s necessary for survival because of the evolutionary nature of the competitive ad-selling marketplace,” says [David] Smith, Sinclair’s chief executive.

Opponents of media consolidation say broadcasters use sidecar agreements as loopholes that let them violate the spirit of FCC ownership rules, which the agency says promote “competition, localism and diversity.” When one owner manages multiple stations in a market, they say, it reduces local-news quality and variety, and drives up pay-TV bills.

The FCC allowed these agreements to help struggling stations reduce costs, not to help companies gain turf, says former FCC Commissioner Michael Copps, a consolidation critic. “This is a shell game and an end run around the media-ownership rules.”

[...] The Columbus stations show how sidecar deals work. In the glass-encased lobby, side-by-side TV screens show programming from two of the stations. Fox and ABC news vans share the parking lot.  The Sinclair-owned WSYX, an ABC affiliate, runs significant aspects of WTTE, a Fox affiliate owned by Cunningham Broadcasting Corp. Sinclair’s WSYX news anchors here also appear on WTTE newscasts.

“We share our news backroom and reporting talent,” says Sinclair Chief Financial Officer David Amy. He says the structure boosted news viewership and that “the beneficiaries of that have been the viewers.”

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