To that end, it bought eight television properties this summer from Allbritton Communications, marking the end of an era for the Washington media family that will pivot its attention toward Politico and other Web ventures. The real prizes in the billion-dollar deal: NewsChannel 8, Washington’s only 24-hour, local news channel, which could be repositioned as a national franchise. And WJLA, the ABC affiliate with one of the biggest television newsrooms in the country.
In the past year, Sinclair has paid almost $2.5 billion to snap up 79 local television stations. For most Americans, local television is still the prime source of news. If all the acquisitions are approved, Sinclair will control that broadcast for a third of U.S. households.
Sinclair is one of a handful of “super group” station owners that includes Gannett, Nexstar and LIN Media. The Baltimore company is family-controlled and has been known to promote the Republican party and right-of-center causes. Its fast-expanding national footprint has raised the guard of media watchdogs.
“We are headed for a world in which fewer than 10 companies will control most of the local TV stations in the entire country,” said Craig Aaron, the president of Free Press, an opponent of media consolidation. “There will be less competition for local scoops, fewer voices on the air and the same cookie-cutter content everywhere you look. As a result, people will be less informed.”
The local television business has undergone a wave of consolidation. In the first half of 2013, there were $6.28 billion in TV deals involving 326 stations, according to SNL Kagan, a media research firm.
Federal communications rules are designed to preserve healthy competition among local newspaper and television outlets. But Sinclair and other conglomerates have deployed a complicated business tactic that allows them to maintain multiple business arrangements in one local market. By merging business and newsroom operations among multiple stations, they can cut costs and boost profits.
“It’s called a virtual duopoly,” said Larry Patrick, a media broker in Elkridge, Md. “They are legal. It doesn’t circumvent any FCC rules.”
Patrick and others said that in most midsize markets, the FCC rule allows media companies to own one TV station and lease a second or third. These are known as sidecar agreements.
The strategy is simple: One company agrees to operate a station owned by another, selling its advertising, managing the finances and even sharing newsroom resources. These agreements closely link the stations and they have long been part of the television business, said Justin Nielson, a media analyst with SNL Kagan.