The News Biz: Is Bigger Better?

How looser FCC rules would aid broadcasters like Sinclair

Weatherman Vytas Reid is bundled in a black overcoat and plaid muffler as he delivers the frigid forecast on Fox 66 in Flint, Mich. Temperatures will rise to a high of only 18 degrees, and snow is on the way, he reports. After the segment, shot on an indoor set, Reid sheds his cold-weather gear. Although he was forecasting for central Michigan, Reid was actually hundreds of miles away in a TV studio north of Baltimore, where it's a good 20 degrees warmer.

Reid is the new face of local TV. But he's not local at all. He's brought to you by Sinclair Broadcast Group Inc., one of the largest independent owners of TV stations in the U.S. With 62 stations in 39 markets, the Hunt Valley (Md.) company launched News Central at its headquarters in October to feed news, weather, and sports to its stations across the country--from Rochester to Birmingham. To some, this hub-and-spoke system is the future, an innovative way to survive in the costly local-news business. To others, it erodes the broadcaster's sacred trust to speak in an original hometown voice. After all, says Jim Bleicher, news director at rival Flint station WJRT-ABC, "the only reason for us to be here on a planet with hundreds of choices in TV is local, local, local."

Now, Fox 66's newscasts have entered a monumental debate about whether consolidation of U.S. media operations shortchanges the public's access to diverse views and local information. Under pressure from federal courts, the Federal Communications Commission is reviewing a half-dozen regulations that restrict the size of TV, radio, and newspaper companies to preserve competition and a spectrum of viewpoints (table). FCC Chairman Michael K. Powell has signaled that he wants to relax the rules by this spring. On Feb. 27, he will hold the commission's only official public hearing on the issues in Richmond, Va. "[We need to] build rules that reflect the digital world we live in today," says Powell, "not the bygone era of black-and-white television."

Not so fast, say consumer advocates, led by Democratic FCC Commissioner Michael J. Copps. They argue that just axing the restrictions will lead to too much consolidation in media, harming a healthy diversity of viewpoints and ultimately undermining U.S. democracy itself. Ad hoc public hearings, at Copps's urging, are cropping up around the country--New York, Los Angeles, Seattle, and Durham, N.C. Local critics, employees of media companies, journalism professors, and advertisers are speaking out--fearful, for example, that if newspaper companies can buy broadcasters in their market, TV networks can own unlimited local stations, and cable companies can combine with anybody, soon one company could control nearly all the news a local community sees and hears. "The multiplicity of voices, choice, and competition that undergird our marketplace of ideas rides on the outcome," says Copps.

Sinclair Broadcast is an example for both sides of the debate. For years, it has been one of the most aggressive consolidators in local TV, pushing the limits of the duopoly rule, which bars broadcasters from owning more than one TV station in a market. If ownership restrictions are eased, Sinclair is poised to reap huge benefits by being able to add more TV stations, further reducing costs. At the same time, as an early, voracious dealmaker in the industry, Sinclair could become a lightning rod for the growing chorus of Powell's critics.

Meanwhile, Sinclair executives insist that the weakening economics of broadcast TV is dictating their strategy. Founded in 1986 by Baltimore entrepreneur Julian Sinclair Smith, the $736 million company specializes in acquiring the poorly rated Fox, WB, and UPN affiliates in midsize markets. Then, it often seeks to manage a neighboring station under the same roof, cutting costs by at least 10% by eliminating duplication. The company argues that combining forces helps keep the weakest stations afloat, thereby adding voices to the local market.

In 1991, when Smith's four sons took over, the company started a series of end runs around the duopoly rule. It bought WPGH-Fox in Pittsburgh and agreed to program local WPPT, now WCWB-WB, in return for a cut of the revenue. Sinclair's moves, amid other pressure, helped force regulators to budge: Today, the FCC allows one company to own two stations in a town as long as one isn't a major network affiliate and the market ends up with at least eight independently owned stations. So Sinclair owns station pairs in 11 cities, ranging from Buffalo to Birmingham, and has two-station partnerships in nine smaller markets.

Even so, CEO David D. Smith sued the FCC in 2001 to loosen its rules, insisting that viewers have access to hundreds of channels, thanks to cable. "In Baltimore, I can't do a duopoly" because there wouldn't be eight TV station owners left, he says. "If it's O.K. for Comcast, an unregulated monopoly, to own the most powerful station in Baltimore, and I can't own the two weakest, what's wrong here?"

What's more, Smith says he is offering more viewpoints to the public by consolidating news operations. In Baltimore, his WBFF-Fox channel programs WNUV-WB's news in partnership. WBFF targets older, more surburban viewers, while WNUV plays to younger, urban, African American viewers with coverage of that community's issues. In Columbus, Ohio, though, Sinclair's WSYX-ABC and WTTE-Fox share a newsroom, and "there's not a big difference between the stories," says David Silverstein, the stations' news director. Meanwhile, over the past two years, Sinclair has shuttered two money-losing news operations in St. Louis and Winston-Salem, N.C.

Sinclair is no stranger to bucking the rules. "David [Smith] has always played beyond the edge," says Jon Mandel, co-CEO at advertising company MediaCom. The Rainbow/PUSH Coalition is suing the FCC for allowing Sinclair to use an alleged minority-front company owned by one of its employees to mask its true control of the second station in many of its local partnerships.

That's more fodder for critics of Powell's push to ease FCC rules. They worry that taking away a voice by consolidating news ownership represents a dangerous slide toward an ever-more-homogenous U.S. media. Perhaps more important, TV station owners, which use--some would say borrow--the public airwaves to ply their trade, have a duty to broadcast high-quality news, not just cheap, reformatted fare. "Somehow, David Smith got the idea that news has to be profitable," says Andrew Jay Schwartzman, CEO of public interest group Media Access Project. "As the name suggests, public service is what broadcasters are expected to do in exchange for the free broadcast license."

A new study of local TV news released on Feb. 17 by advocacy group Project for Excellence in Journalism bolsters this critique. It concludes that stations owned by big companies are capable of high-quality programming but tend not to deliver top-notch news. The study was conducted over five years and analyzed some 23,000 stories broadcast on 172 TV stations.

As debate heats up and the FCC reviews the 13,000 public comments filed and the 12 studies it commissioned on the issue, TV execs no doubt are already drawing up plans to expand their reach. They're counting on Chairman Powell's free-market leanings. But as critics speak out at upcoming hearings, concern about control of media outlets by ever-growing conglomerates could start to give the FCC's five commissioners a lot more to ponder.

Corrections and Clarifications ``The news biz: Is bigger better?'' (Media, Mar. 3), potential changes to media ownership rules were listed in a table under the heading ``FCC Plan.'' The FCC has no set proposals at this time.

By Catherine Yang in Hunt Valley, Md.

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