When a television station changes hands, almost regardless of size, it’s sort of a big deal.
After all, the public owns the airwaves. And the public has the right to know who the new tenants are and whether they’re going to play by the rules.
But it’s not as much of a big deal when the buyer and seller are, more or less, one in the same.
That helps explain the collective shrug at the proposed ownership shuffle at WTAT-TV, the Lowcountry Fox affiliate, along with a covey of other small and midmarket stations.
But this seemingly minor transaction is bigger than it appears. The deal could help resolve a nagging national debate over the number of TV signals a broadcaster is allowed to own in places such as Charleston. And it would be about time. Regulators have been pausing and repausing the issue for more than a decade.
At the heart of the matter is Sinclair Broadcast Group Inc., an aggressive company that’s grown into an industry powerhouse by openly skirting the government’s TV ownership limits.
The Hunt Valley, Md.-based company has argued for years that those rules are outdated and arbitrary.
That could be, but the Federal Communications Commission still bans TV “duopolies,” meaning individual broadcasters can’t own multiple signals in markets such as Charleston with eight or fewer stations, or “voices.”
Sinclair has found an easy way around that restriction. Its local operations show exactly how it does it. On paper, Sinclair owns one Charleston station outright: WMMP-TV. It bought the MyNetworkTV affiliate in 1998.
But since that time, Sinclair also has been making programming decisions, selling air time and calling the shots at WTAT in North Charleston under a deal with owner Cunningham Broadcasting Corp. Cunningham is what Sinclair calls a “sidecar” business. The company, which owns six other stations, including WMYA-TV in Anderson, had been controlled by Carolyn C. Smith, the mother of Sinclair CEO David Smith.
“We’ve called it ‘covert consolidation’ in the past,” said Sinclair watcher Matt Wood, policy director at Free Press, a group that pushes for more diversity in the media business.
The ownership of the Arco Lane station is up for public debate because the Smith family matriarch died last year. The settlement of her estate includes a proposal to transfer all of Cunningham’s TV licenses, including WTAT’s.
According to documents filed with the FCC in February, the deal would go down like this: Michael Anderson, a former Wall Street media analyst who is president of Cunningham, will distribute the company’s shares to Smith’s four sons, all insiders at publicly traded Sinclair.
Noting the FCC ownership limits, the brothers immediately would transfer the stock to Anderson. But they also are requesting an option to buy the shares from him at some undefined point in the future. Anderson and Sinclair did not respond to phone calls seeking comment.
Sinclair’s willingness to flout FCC rules without recourse has some of its critics seething, particularly media watchdog groups like Free Press. Their main beef is that shadow duopolies and looser TV ownership limits in general give the public fewer choices of competing news and information sources.
But regulators have mostly sat on their hands as Sinclair continued to use sidecars to expand its broadcasting empire. At least four protests from 2002 and 2004 involving the company are still classified as pending before the FCC.
Ripe for review
The festering issue is ripe for debate, said Harry Jessell, editor and co-publisher of TVNewsCheck.com, which reports on the broadcasting industry.
Jessell noted that Sinclair no longer has the monopoly on TV duopolies, though he did describe the company as “the master of circumventing the rules.”
It just so happens that the FCC, a panel that includes South Carolina’s Mignon Clyburn, is now moving to finally update its TV ownership regulations after years of indecision and inaction.
Jessell said the commissioners could either allow the dual-ownership deals to stand or they could banish them all together.
“One of the proposals is to close the loophole and give everybody two years to unwind their existing ... duopolies,” he said. “That would really upset the industry if they do that.”
Jessel take a pragmatic view. While it’s quite possible that the FCC will vote against broadcasters like Sinclair, that wouldn’t be fair at this point, he said.
“You build a business on something that was tacitly approved by FCC for years. Now they want to undo it?” Jessell said.
Either way, it’s past time for the FCC to address the question of who’s using or abusing the public airwaves. The owners deserve an answer
Reach John McDermott at 937-5572. Note: An abbreivated version of this column was published online and in the print editions of The Post and Courier.