David Smith, president, CEO and chairman of Sinclair Broadcast Group, the country’s largest owner of local TV stations, called the election of a Republican for president a rare chance to eliminate ownership caps that he said unfairly burden broadcasters when competing for viewers and advertisers against cable TV providers and the digital platforms of Facebook and Alphabet’s Google.
“There’s a really serious opportunity to seek complete deregulation in the broadcast industry,” Smith said on Wednesday an an investor conference hosted by Wells Fargo. “If Donald Trump is as deregulatory as he suggests he is, to wipe away regulations we’re going to be the first industry in line to say, ‘We are the most over-regulated industry that exists in the United States.'”
A federal statute bars broadcasters from owning TV stations that reach more than 39% of U.S. TV households. Sinclair as well as major broadcasters CBS, 21st Century Fox, NBC owner Comcast, Disney’s ABC and station owner Tribune Media have been pressing the FCC to raise or eliminate the cap, in some cases for more than 20 years.
Broadcasters have argued that such limitations in the age of the Internet, when a plethora of news sources are readily available, unfairly limit the size and scope of their businesses
Shares of Sinclair, Tribune Media and Gray Television rose steadily following Trump’s victory amid speculation that a Federal Communications Commission with a Republican majority would loosen media ownership rules, or in the case of the TV station cap, ask Congress to do so. Since Tuesday, Sinclair were gaining 9.4% while Gray was up 22% and Tegna had added 6.7%.
Smith, 65, who will step down as Sinclair CEO in January after 28 years at the company, was unequivocal when he said Sinclair would seek to “eliminate the cap immediately.”
To be sure, Trump has vowed to stop AT&T’s $85 billion acquisition of Time Warner, arguing that a single company shouldn’t be allowed to own so many high-profile media properties. But whether Trump was playing populist or would implore his FCC to uphold media ownership restrictions remains unclear. Less uncertain is that removing the 39% ownership cap likely would spark a wave of mergers and acquisitions among station groups looking to gain scale. Sinclair sees greater reach as essential to spreading out the costs for a business that uses a team of anchors operating out of a studio at the company’s headquarters in Hunt Valley, Md., near Baltimore, to broadcast largely homogenized national news reports to augment the news teams at its approximately 100 local network affiliates nationwide.