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Why there are big local problems with Sinclair-Tribune Media's national deal

It's a big corporate deal that just doesn't pass the smell test.

I'm referring to Sinclair Broadcast Group's estimated $4 billion bid to acquire Chicago-based Tribune Media. The proposed acquisition includes the iconic WGN-TV and a raft of other broadcast properties scattered throughout the country.

If completed, Sinclair will control a whopping 233 TV stations that reach 72 percent of U.S. households. The transaction, which includes Tribune Media's 42 stations, radio station WGN-AM and other assets, is being reviewed by the Federal Communications Commission and the Justice Department's antitrust unit.

Although its backers are hoping for fast-track approval, Sinclair's buyout of Tribune Media should not be endorsed by regulators. If approved, this arrangement will spawn a media behemoth that's capable of crippling competition and weakening the broadcast franchises that millions of consumers depend upon for local news, information and entertainment.

Baltimore-based Sinclair strongly disagrees with this viewpoint, which is being invoked by a growing coalition of opponents. In an FCC filing on Tuesday, the company defended the buyout as a means of creating the needed scale, or "natural synergies," to ensure access to free, over-the-air television.

Free TV is a good thing, but anytime a company starts yapping about "synergies" it's often the customers, employees and suppliers that take it on the chin.

As such, you can count on the reconstituted broadcast entity imposing a stringent, centralized and more homogenized business and programming template on its empire.

The bulked-up company will also be under great pressure to boost earnings, so it is conceivable Sinclair management will chop costs with a vengeance by consolidating, or outright dumping, homegrown news, weather, sports or other programming.

That's not a winning formula for local, diverse and independent television content — an approach that is the best way to serve hometown communities.

Keep in mind that we've witnessed similar belt-tightening in other consolidating industries and it has produced, at best, mixed results.

Over the years, airlines, banking, medical technology and other businesses merged and then purged employees — often hindering customer service in the process.

Then there's politics.

What's undoubtedly making this media deal more problematic is Sinclair's hard-right tilt, which manifests itself in conservative commentaries and stories that management insists its stations carry on a recurring basis.

Yet, it's not Sinclair's philosophical bent that's the real issue. I'd be as worried if some hardcore liberal-thinking brain trust was determined to impose its point-of-view commentaries and reports on 72 percent of the country.

More unsettling is the fact this deal came to life shortly after the return of a regulatory loophole by the Trump administration.

In April, the FCC reinstated the so-called UHF discount, which helps the combined Sinclair-Tribune entity get under an ownership cap limiting coverage to 39 percent of the TV households nationwide.

Ask yourself: Did this sudden change of heart come because Sinclair's brass is tight with the Trump administration and its network is home to some presidential surrogates and supporters?

Some Democratic congressional representatives, including Chicago-area Rep. Jan Schakowsky, and a plethora of business interests on both sides of the political aisle, suspect there's something fishy.

Recently, a House bill was introduced to block the merger while a surprising assembly of varied and occasionally conflicting corporate powers is beseeching regulators to stop this buyout.

Among the opposition: satellite, cable and wireless industries; media organizations; content producers and distributors; independent broadcast networks; and some public interest groups.

They are justifiably alarmed about the possibility of Sinclair enjoying unprecedented market power — again there's that 72 percent of households — to charge cable and satellite providers higher rates to carry its station network's content.

Those added costs will eventually be passed on to consumers in higher cable and satellite TV bills.

In an email statement sent to me, Sinclair dismissed the opposition's concerns, saying the "proposed merger will advance the public interest by helping shore up an industry buffeted by well-known economic challenges." It also said it would be investing "deeply" in local news, sports and entertainment programming.

(By the way, Tribune Media is separate from the Chicago Tribune, which is owned by Tronc. Tribune Media declined to comment.)

Sinclair is right about the changing media landscape and the accelerating competitive pressure foisted on traditional broadcast stations from online powerhouses and other new media rivals.

Some TV station consolidation is necessary to succeed in this fast-changing media world.

But the Sinclair-Tribune Media pact isn't the tonic it purports to be.

Hundreds of stations, including "Chicago's Very Own" WGN-TV, along with their viewers and customers, will suffer the consequences of this troubling agreement.

That's why this deal just doesn't smell right.

roreed@chicagotribune.com

Twitter @reedtribbiz

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