As expected, the American Cable Association has called on the government to cast a critical eye on the proposed $6.4 billion merger of Nextar with Tribune and says that without tough conditions and or divestitures, the deal should be blocked.
"Regulators should ensure that the proposed massive combination cannot use its clout - 216 stations in 118 markets reaching 72% of all U.S. TV households - to wreak havoc during the negotiation of retransmission consent contracts with multichannel video programming distributors (MVPDs)," said ACA president Matt Polka.
ACA opposed Sinclair's ultimately failed effort to merge with Tribune over similar concerns.
"Absent remedial action, such as divestitures or strong conditions, the merger should be denied because it would cause particular harm to the smaller MVPDs that are routinely targeted for payments far in excess of the prevailing fees paid by larger ones," ACA said, particularly in the 15 markets where the two broadcast groups owners' stations overlap.
ACA minced no words. Polka said as currently proposed, the merger would lead to more signal blackouts and "price gouging" by Nexstar--it cited Nexstar's boast of boosting its retrans revenue by $75 million through after-acquired clauses, which apply a buyers' retrans rates to acquired stations.
And he wasn't through: "Nexstar has a long history of using its dominant market position to impose punishing retransmission consent fee increases on smaller MVPDs. And if Nexstar can't get its fee hike, it will resort to signal blackouts timed to maximize viewer inconvenience, such as prior to national holidays or marquee sporting and entertainment events."
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