This morning, the Tribune Media Company announced that it has terminated its merger agreement with Sinclair Broadcast Group and filed a lawsuit against the latter firm for breach of contract. The collapse of the deal means that Denver's KWGN, a Tribune property popularly known as Channel 2, won't fall under the Sinclair umbrella, where insiders feared it would become a right-wing screed machine.
"Why Local News on Denver's Channel 2 Could Disappear by Year's End," published in June, detailed the potential repercussions of the Tribune-Sinclair pact from a local perspective. At that time, sources who spoke to Westword thought odds were good that the outlet's homegrown news operation would be eliminated, possibly as soon as year's end, in favor of a nationally produced block of conservative news programming.
Sinclair's profile rose, sparking the attention of HBO's John Oliver, among others, in May 2017, when it announced the purchase of 42 Tribune Media outlets for a reported $3.9 billion. This move immediately led to speculation that the conglomerate, whose viewership in its biggest markets was estimated at 2.2 million, wanted to create a national network of GOP-friendly stations that might challenge the dominance of cable powerhouse Fox News.
Even before the Tribune Media buy, Sinclair had been using its properties to spread a conservative message via commentaries by former executive Mark Hyman, known for attacks on so-called snowflakes and a defense of the Washington Redskins football team, whose executives refuse to replace a name that many people view as racist. Also part of the Sinclair team is Boris Epshteyn, a former adviser to President Donald Trump whose own invective flies with the right wing.
The Hyman-Epshteyn packages are designated as "must-run," meaning that affiliates have to include them in newscasts whether local managers want to or not. And although some stations, like KOMO in Seattle, tried to soften this edict's blow by airing some of the salvos during the wee hours, the prospect that this could change in the future likely influenced Fox31 news director Holly Gauntt to jump to Denver7 mere months after Sinclair's deal was announced.
Note that Fox31 is involved in a sister-station agreement with KWGN. But with the former's move to 21st Century Fox, the domain of Fox News owner Rupert Murdoch, Channel 2 was seen as fated to wind up in Sinclair's portfolio — and insiders believed the split endangered the latter's news operation.
At present, Channel 2's news productions are put together at Fox31, using shared equipment, resources and personnel. Some of the on-air talent, such as evening anchor Mike Landess and morning host Ernie Bjorkman, only appear on Channel 2, and the signal has its own producers, as well. But most of the reporters can be seen on both stations.
Had the sale been completed, Fox31 and Channel 2 could have made a new deal to keep this approach in place. But TV observers with whom Westword spoke saw that as unlikely. If Sinclair really desired to take down Fox News, they speculated, there was no incentive for a Fox-affiliated station to lend a helping hand. That was particularly true when it comes to programs such as Daybreak, Channel 2's a.m. show, which would likely compete directly with Fox31's own offerings.
With Fox31 out of the picture, the theory went, Channel 2 could only continue to produce local news on its own if Sinclair paid to build a brand-new facility and hire a new crew — a possibility, but a hugely expensive one, especially in light of KWGN's ratings, which remain small compared to other local-news purveyors in Denver.
As for what might have replaced local news on Channel 2, a possible answer could be found in a Politico report that said Sinclair executives were conceiving a collection of news programs that would run between three and six hours. Such shows would basically compete against Fox News's prime-time staples without Sinclair having to launch a 24-hour news channel into an already oversaturated market.
In Denver, this cost-effective alternative could have meant national news produced by Sinclair airing from 4 to 10 p.m., sans any local component.
Why didn't this scenario come to pass? Largely because the Federal Communications Commission declined to give its immediate blessing to the merger.
In its press release announcing the latest developments, Tribune Media places the blame for this turn of events squarely on Sinclair.
"In the Merger Agreement, Sinclair committed to use its reasonable best efforts to obtain regulatory approval as promptly as possible, including agreeing in advance to divest stations in certain markets as necessary or advisable for regulatory approval," the item states. "Instead, in an effort to maintain control over stations it was obligated to sell, Sinclair engaged in unnecessarily aggressive and protracted negotiations with the Department of Justice and the Federal Communications Commission over regulatory requirements, refused to sell stations in the markets as required to obtain approval, and proposed aggressive divestment structures and related-party sales that were either rejected outright or posed a high risk of rejection and delay — all in derogation of Sinclair’s contractual obligations."
Ultimately, the item goes on, "the FCC concluded unanimously that Sinclair may have misrepresented or omitted material facts in its applications in order to circumvent the FCC’s ownership rules and, accordingly, put the merger on indefinite hold while an administrative law judge determines whether Sinclair misled the FCC or acted with a lack of candor. As elaborated in the complaint we filed earlier today, Sinclair’s entire course of conduct has been in blatant violation of the Merger Agreement and, but for Sinclair’s actions, the transaction could have closed long ago."
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Also highlighted is this quote from Peter Kern, Tribune Media's chief executive officer: "In light of the FCC’s unanimous decision, referring to the issue of Sinclair’s conduct for a hearing before an administrative law judge, our merger cannot be completed within an acceptable time frame, if ever. This uncertainty and delay would be detrimental to our company and our shareholders. Accordingly, we have exercised our right to terminate the Merger Agreement, and, by way of our lawsuit, intend to hold Sinclair accountable."
The death of the Tribune-Sinclair nuptials is being cheered by progressive media organizations such as Free Press, whose president and CEO, Craig Aaron, issued a statement that reads in part: "The collapse of the merger is great news for dozens of local communities that will be spared Sinclair’s slanted coverage and ridiculous must-runs. For years, Sinclair has been a dishonest broker at the FCC, using fuzzy math and sketchy shell companies to evade the agency’s rules and expand its empire. Its history of deceit and arrogant approach to the agency finally caught up with Sinclair. The broadcast giant's double-dealing became too much for Tribune executives to bear. As details of Sinclair’s deceptions emerge — and with other investigations underway at the Department of Justice — it’s reasonable to question whether the broadcaster deserves to hold any licenses to profit off the public airwaves."
No doubt employees of KWGN's news operation are just as thrilled as Aaron, given that possible unemployment in a matter of months is no longer looming over them.
As a bonus, Channel 2 will be able to continue airing programming from the CW Network in prime time, including Riverdale, a show beloved by thousands of Denverites. Now we'll not only be able to keep watching Mike and Ernie, but Archie, Betty, Veronica and Jughead, too. What a beautiful day.