While the streaming service Aereo had Fox talking of an abrupt potential
shift in business models earlier in the week, Sinclair Broadcast Group
President and CEO David Smith says he's unimpressed by the challenge it
represents.
Addressing investors following the announcement of Sinclair acquiring the
Fisher Communications stations, Smith said there's "absolutely
nothing" proprietary about Aereo's technology, making its challenge, in
his mind, much less threatening.
"If it turns out to be a $10 million business, my guess is the entire
broadcast industry would wake up tomorrow and say, we're going to do that
too," Smith said. "Frankly I have no concern about Aereo
whatsoever."
The Fisher acquisition would give Sinclair a massive 29 Fox affiliates, but
Smith was unconcerned about Fox's statement earlier in the week about the
possibility of it going to a cable network. "The notion that they would go
to cable means they go to cable through us," he said. "I think the
idea that Fox is going to cable means that the affiliates would go to cable.
We're already on cable -- it simply means changing over the air content to
cable and satellite content."
Sinclair agreed to pay $373.3 million for the Fisher stations, continuing a
stunning run of acquisitions that have totaled close to $2 billion in the past
19 months. The latest batch, if it passes muster with the FCC, would bring
Sinclair's reach to 33.7% of U.S.
households. Besides its Fox holdings, that includes 24 CBS, 19 ABC and 14 NBC
affiliates.
Having the Fisher stations in its portfolio, and all the inherent synergies,
would've spelled $1.5 billion in 2012 pro forma revenue, said Sinclair's
principals on the conference call.
Smith suggested Sinclair may not be done acquiring. He said the group still has
room under the ownership cap because the FCC counts a UHF station as a half.
"I think we can do a lot more, probably," he said. "We're at
18-20% the way the FCC calculates the number. We can double, theoretically, in
size and still not be at the 39% number."
Sinclair's acquisitions run kicked off with a $200 million buy of the Four
Points group in September 2011, followed by $385 million for the Freedom
Broadcasting stations that November, followed by $412.5 million for six Newport
TV stations -- and then $99 million for the Cox quartet and a $370 million Barrington
pickup, the latter slated for its Chesapeake TV subsidiary.
There were a few smaller deals too, such as $54 million for WHAM Rochester
(N.Y.) and $40 million for WTTA Tampa.
