Buckeye Blackout: The Retransmission Consent Problem in a Nutshell

WNWO, the NBC affiliate in the Toledo, Ohio, area has forced Buckeye CableSystem to remove its signal after the existing retransmission consent agreement expired. WNWO was recently purchased by Sinclair, which is refusing to allow Buckeye to air the signal while negotiations continue.

Sinclair bought WNWO (and 17 other stations) just three weeks ago and is already asking Buckeye CableSystem to pay 10 times what it was previously paying for WNWO.

Sinclair now reportedly owns, operates, programs or provides sales services to 164 TV stations in 77 markets. Its stations reach nearly 40% of U.S. TV households. More troubling, in markets where they already own a Big 4 station, Sinclair is acquiring another one, spinning it off, and then entering into a coordination agreement that that results in them controlling two Big 4 stations in the same market, giving it the ability to black out multiple networks at once.

In other words, a national television conglomerate is forcing local cable companies to accept exorbitant retrans fee increases. These profits then help enable it to purchase more local stations. Keep in mind that retransmission consent was originally intended specifically to support local news and public affairs programming.

The National Association of Broadcasters likes to claim that the retrans issue is a “manufactured crisis” created by a few of the largest pay-TV companies. There are numerous reasons this is absurd – see here for a few of them. But the Buckeye example illustrates that it’s not just the largest pay-TV companies that have to deal with blackouts.

In fact, many of the smaller cable companies have no choice but to capitulate to the demands of broadcast conglomerates like Sinclair because they don’t have the resources that the bigger providers do to absorb the potential loss of customers or to engage in an expensive public relations fight.

So it’s not a question of whether Buckeye CableSystem will win in this fight. It can never win as long as the system is so tilted in favor of the broadcasters. (The retransmission consent system is a “far cry from the free market,” no matter how many times the NAB repeats this false claim.) It’s only a matter of how much it will have to pay to boost Sinclair’s bottom line, all under the guise of “localism.”