BALTIMORE—Sinclair’s president and CEO Chris Ripley has backed a proposal floated in an op ed piece written by FCC Commissioner Nathan Simington and his chief of staff that would cap network affiliate fees at 30%.
“The piece highlights this proposal as a way to protect local broadcasters and local journalism from big tech and big media,” Ripley said in a Q1 2025 earnings call with analysts on May 7. “The implementation of such a proposal would allow for the strengthening of local broadcasters and local news throughout the country. We look forward to continuing to work with Chairman [Brendan] Carr and the rest of the SEC on the very welcomed and long overdue deregulatory approach to the broadcast industry to help level the playing field."
During the call Ripley also that that “we, along with the NAB and the entire industry are hopeful that the many of the woefully outdated FCC regulations that have hampered growth in the broadcast industry over the recent decades will be revisited, if not eliminated, in the coming months and we remain hopeful that most of the outdated ownership rules impacting the sector will be modified to allow sensible M&A and portfolio rationalization.”
“In addition, the industry will be lobbying for other issues impacting the sector, particularly the rules that prohibit broadcasters from negotiating directly with virtual MVPDs as well as the rules that will allow the industry to rapidly sunset ATSC 1.0 networks, which will help accelerate wide adoption of next-gen broadcast products and services,” Ripley continued.
In response to a question about the network fees, Ripley insisted that the FCC does have the authority to regulate them. “The FCC does have the ability to regulate the relationship between networks and affiliates that is a part of their charter,” Ripley said. “So obviously, capping a major expense like that could be very helpful in terms of leveling the playing field with us in big tech and big media. And it could also open up bigger opportunities for us in terms of filling in dayparts that maybe the networks don't want to service anymore, which would also dovetail with the FCC's objectives.”
“I think what our key takeaway is from Nate Simington op-ed is that we are seeing this groundswell of deregulatory support for the broadcast industry that we believe is well overdue,” Ripley also noted. “And the right answer for the industry, I think, will end up being a combination of things some of which will be loosening up ownership rules, sunsetting 1.0 but other ideas that are coming to the surface here. And we're just thrilled that the FCC is stepping in to help level the playing field.”
During Q1 earnings calls with analysts, most broadcast executives were bullish about the prospects of FCC deregulation and changes in ownership rules that would fuel a wave of merger activity. More on those comments from executives at Nexstar, Scripps, Tegna and Gray is available here.
Others however were more skeptical about prospects for the FCC or Congress getting involved in the regulation of network fees.
Perry Sook, chairman and CEO of Nexstar Media Group and chair of the NAB’s Joint Board of Directors noted during their Q! Earnings call that “we have a great deal of respect for Commissioner Simington and his approach to free markets and deregulation. I would say that his thoughts were expressed in an op-ed, which I would characterize as one man's opinion. I will tell you, having...been on Capitol Hill seven times so far this year, there is very little interest in getting involved in the commerce between stations and networks other than there has been an increasing interest in the asymmetrical approach to virtual MVPD's and traditional MVPD's, given that YouTube now promotes themselves as the third largest MVPD."
“So our rules of engagement are different,” he continued. “And I don't think anyone feels that, that makes much sense. But listen, we are the largest affiliate groups and among the largest affiliate groups of all of the big 4. We happen to own the big 5 and would not be handcuffed by a 30% rule should it come into effect in terms we aspire to a 30% distribution revenue for the CW from our affiliates. But at this point in time, I think there will be very little traction for that taking hold. So I would take it as the op-ed that it was, but I don't know that I see it gaining much traction in Washington or in the marketplace.”
