Ahead of Thursday’s FCC vote to potentially end its cap on broadcast station ownership, Sinclair CEO Chris Ripley shared his support for its removal, saying it would allow local TV owners to better compete against the well-capitalized tech giants.
“The removal of the national ownership cap would set the stage for broadcasters to be able to compete on a more level playing field, as the industry finds itself competing against big tech and streamers that are not subjected to comparable regulatory constraints,” Ripley said on Wednesday’s earnings call.
The CEO also noted removing the cap would “strengthen broadcasters’ ability to invest in local news across the country,” as well as open up M&A opportunities.
“As we continue our strategic review process, the increased clarity and support from an improved regulatory environment could help facilitate M&A activity across the industry,” Ripley continued. “Sinclair is well prepared to participate in value creating consolidation, and we will remain disciplined in how and when we do so.”
Should the vote pass, Ripley noted the potential rule change would mark a “very significant” shift as the company evaluates large scale M&A, which the CEO noted is a “major objective” for the company.
“This really de-risks those opportunities, and we expect that some of the counterparties that we are interested in will be more likely to want to transact,” Ripley said.
Ripley seemed optimistic about the odds of the removal passing, saying “we expect it to be a historic day for the broadcast industry tomorrow.”
“We couldn’t be happier, and we certainly applaud the FCC for taking this very meaningful step to remove an outdated regulation that really just has no place in this modern media marketplace,” he said.
The FCC cap currently prohibits broadcast owners from controlling stations in more than 39% of markets, but Thursday’s vote could remove the cap altogether. Removing the cap would also help push along Nexstar’s acquisition of Tegna, which is at a standstill.
Critics and consumer advocate groups, however, have warned that removing those caps would give the few affiliate TV owners left the ability to further consolidate their power. The consequences could include the erosion of local independent news coverage.
Ripley noted the company “fully expect[s] people to challenge this order,” but believes the FCC “is on solid legal ground here.”
“We’ll be able to transact under this new rule shortly after the vote happens, as soon as it gets into the federal registry,” Ripley said.
