By Harvey Arnold, Vice President of Engineering, Sinclair Broadcast Group
There have been a lot of misleading claims made lately on the impact that Sinclair’s acquisition of Tribune will have on the FCC’s repack process. Opponents to our merger are fabricating tales that the combined Sinclair/Tribune will intentionally delay completion of the repack. Nothing could be further from the truth. As Sinclair’s lead engineer, I want to set the record straight.
The Tribune deal has no impact on the timing of the repack completion. The repack process started months ago, when I assembled a team of over 20 professionals to tackle repacking 98 stations. We are proud to say that Sinclair is currently on schedule to meet all of its Phase Completion Dates. We have submitted orders for our first 20 high power antennas, along with 20 wideband auxiliary antennas and transmission line runs, and are ready to submit orders for more, but are awaiting permission from the FCC to maximize our power and antenna patterns. We have kept the FCC’s Media Bureau regularly updated on our progress, and I believe they fully understand the investment of time, expertise and other resources we are making in this effort. While we can’t and don’t speak for Tribune today, we understand that their engineers are working just as diligently as we are to meet their Phase Completion Dates.
Sinclair has neither the ability nor the incentive to slow down the repack. There is no formal mechanism for any broadcaster to single-handedly slow down the repack. The current FCC rules allow it to immediately force any station off the air if it fails to meet a Phase Completion Date (with very few, highly technical exceptions). So “delaying the repack” means, as a practical matter, the pointless and, indeed, suicidal act of losing our audience, advertisers, and other revenue streams. To what end? None of our opponents have articulated a cogent rationale as to why we would slow down the repack. Because there isn’t one.
To the contrary, Sinclair wants the repack to be completed quickly and efficiently. Without a completed repack, we can’t roll out Next Gen TV as efficiently as we would like to. As the ATSC 3.0 technology standard becomes finalized and approved by the FCC, the implementation can most efficiently happen in conjunction with the repack. Delaying the repack would mean delaying a smooth rollout for Next Gen TV for consumers. We are very excited about the competitive services that Next Gen TV can offer consumers, including new mobile video services. Having spent years in leading the development of this technology, we have no incentive to delay its implementation.
Our ownership of Dielectric is actually helping the repack. We own Dielectric, the largest TV antenna manufacturer in the U.S., which is a supplier of antennas to approximately 80% of the market. Our opponents claim that we will use this leadership in the industry to (inexplicably) not sell broadcasters the new antennas they need to repack. Huh? We bought Dielectric to be in the antenna building and selling business, not to not-build and not-sell antennas. In fact, Dielectric has invested heavily in preparation for repack over the past four years. Investment in new product development, new manufacturing equipment, new engineering software, hiring and training of staff culminated in the recent opening of a second factory that will employ 50 people and enable Dielectric to produce up to 1,300 UHF main and auxiliary antennas for this repack. What most people don’t know is that we bought Dielectric at a time when it was insolvent, about to be shut-down by its corporate parent due to an FCC freeze on granting new licenses. Without Sinclair stepping in to keep Dielectric as a viable operating subsidiary, this critical manufacturing capacity would not be available today, making the repack much more expensive and inevitably delaying its completion.
So don’t believe anything you hear about Sinclair delaying the repack. It’s all nonsense, motivated by companies that couldn’t care less about the future of broadcasting. I’ve dedicated my entire career to broadcast engineering and consider it a crowning achievement to shepherd Sinclair successfully through this challenge. And on schedule!
Additional Information and Where to Find It:
This communication may be deemed to be solicitation material in respect of the proposed transaction between Sinclair and Tribune. In connection with the proposed transaction, Sinclair has filed with the SEC a registration statement on Form S-4 (the “Form S-4”), containing a preliminary proxy statement of Tribune, and Sinclair and/or Tribune may file one or more other documents with the SEC. This communication is not a substitute for the Form S-4, the proxy statement or any other documents that Sinclair and/or Tribune may file with the SEC or send to Tribune shareholders in connection with the proposed transaction. SHAREHOLDERS OF TRIBUNE ARE URGED TO READ ALL RELEVANT DOCUMENTS FILED WITH THE SEC, INCLUDING THE FORM S-4 AND THE PROXY STATEMENT, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION.
The Form S-4 became effective on September 6, 2017. The proxy statement will be mailed to shareholders of Tribune. Investors and security holders will be able to obtain copies of these documents, including the proxy statement/prospectus, and other documents filed with the SEC (when available) free of charge at the SEC’s website, http://www.sec.gov. Copies of documents filed with the SEC by Sinclair will be made available free of charge on Sinclair’s website at http://www.sbgi.net or by contacting the Sinclair’s Investor Relations Department by phone at (410) 568-1500. Copies of documents filed with the SEC by Tribune will be made available free of charge on Tribune’s website at http://www.tribunemedia.com or by contacting the Tribune’s Investor Relations Department by phone at (212) 210-2786.
Participants in the Solicitation:
Tribune and its directors and executive officers may be deemed to be participants in any solicitation with respect to the proposed transaction under the rules of the SEC. Information about Tribune’s directors and executive officers is available in and Tribune’s proxy statement for the 2017 Annual Meeting of Shareholders, which was filed with the SEC on March 24, 2017. Additional information regarding the participants and a description of their direct and indirect interests, by security holdings or otherwise, by reading the proxy statement.