Sinclair CEO Backs FCC Move to Scrap Broadcast Ownership Cap

The Federal Communications Commission is set to vote on Thursday on whether to eliminate the rule that bars a single owner from controlling broadcast stations reaching more than 39 percent of U.S. households. The cap, enacted in the 1990s, has become a focal point for large-scale merger discussions in the television-broadcast sector.

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Local-TV owners have argued that the cap is “irrelevant in a pre-streaming age.” The rule has constrained the growth strategies of the nation’s biggest station groups. Nexstar Media Group’s $6.2 billion acquisition of Tegna remains stalled because the combined reach would exceed the 39 percent limit, and Sinclair Broadcast Group has also floated a hostile bid for E.W. Scripps. Proponents say removing the cap would level the playing field against tech giants and streaming services that face no comparable ownership restrictions.

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Sinclair chief executive Chris Ripley told Wall Street analysts that the FCC’s action would “de-risk” merger opportunities and enable broadcasters to invest more in local news. He added that the agency “is on solid legal ground” to change the rule, even as the FCC’s lone Democratic member, Anna Gomez, warned that only Congress can repeal a statute it originally enacted. Ripley nonetheless expects challenges to the order, noting that the FCC’s mandate includes deregulation as market conditions evolve.

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• Sinclair reported second-quarter revenue of $840 million, a 7 percent increase from the prior year, while its loss widened to $1.06 per share.

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• The ownership cap limits control of stations in more than 39 percent of U.S. markets.

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• “We couldn’t be happier, and we certainly applaud the FCC for taking this very meaningful step to remove an outdated regulation that really just has no place in this modern media marketplace,” — Chris Ripley, sinclair CEO

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• “It is very significant to change this rule,” — Chris Ripley, sinclair CEO

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• “We fully expect people to challenge this order, and we think the FCC is on solid legal ground here in terms of their authority to change this rule and the rationale behind changing it,” — Chris Ripley, sinclair CEO

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• “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,” — Chris Ripley, sinclair CEO

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• “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,” — Chris Ripley, sinclair CEO

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• “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,” — Chris Ripley, sinclair CEO

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