Sinclair Eyes 'Overlay Network' for Dayparts of National Footprint

Sinclair Broadcasting Group is developing an overlay network to supplement the programming its affiliated stations air-especially in daypart segments, which now carry a variety of syndicated programming.

We dont envision creating a new network to compete with existing networks, Sinclair President and CEO Christopher Ripley said during a presentation to the Media Institutes monthly luncheon in Washington on Tuesday, June 20. He described the overlay as a supplement to enhance existing networks we already carry.

Ripley also emphasized Sinclairs keen focus on local news, which he called the most dependable part of our business a jewel. He said that a major part of the $40 million investment Sinclair made after acquiring Fisher Communications 20 stations and Allbritton Communications seven stations in 2013 went into bolstering local news capabilities.

Related: Northwest Broadcasting Joins ATSC 3.0 Consortium

He also hinted at visions for expanding Sinclairs Comet, Charge! and TBD secondary network transmissions, which now consist almost entirely of library content.

Ripley said he expects to add more original programming after the Tribune Media deal closes, noting that Sinclair will be more vertically integrated.

As for the current pending purchase of Tribune Media, Ripley said he expects the merger to be completed by the end of the year after federal approvals. He used the deal as an example of broadcastings relatively small role in the communications ecosystem.

Related: Sinclair to Senate Dems: Lets Talk

When you look at the entire communications industry, broadcasting is a pimple, he said.

Even as larger broadcasters, we are tiny compared to telephone companies. Thats the ecosystem we play in, Ripley said, adding that Thankfully, [FCC] Chairman [Ajit] Pai has an action to reassess rules that restrict broadcasters ability to compete against other media.

The internet is vacuuming up every industry and broadcasting will not be immune from that, Ripley said. All the rules that govern this industry are antiquated, from a bygone era. He cited data showing that local TV stations account for only 16% of local advertising now that more online sites are offering localized and targeted commercials, often including 15- and 30-second video ads that look like TV commercials.

Related: The Deal That Turns Sinclair Into a Major-Market Gatekeeper

Big ATSC 3.0 Visions

Ripley extolled the values of the evolving ATSC 3.0 format (also called NextGen TV), which Sinclair is heavily backing. He emphasized that the planned simulcasting of 3.0 and existing 1.0 digital transmissions will require broadcaster cooperation at the local level, but that it wont require public funding as did the 2009 digital transition.

Stressing the mobile first value of NextGen TV, Ripley also acknowledged its capability to carry up to five times the amount of data as existing digital broadcast and that for the consumer it will offer lower costs than conventional wireless systems.

3.0 will ultimately not just be used for TV or mobile video, he said, but rather it will be the foundation for all types of as-yet unimagined applications. He cited a recent test of 3.0 with an automaker in Michigan, which developed 3D mapping. It was a perfect use case that we didnt even know existed, Ripley said, indicating that 3.0 will find applications in the Internet of Things and other evolving ventures.

You need scale to provide free services, he said, again to support his view that Sinclairs near-nationwide footprint will be achieved via acquisitions or the consortium of local stations that it is spearheading.

During a wide-ranging on-stage discussion with Media Institute Chairman Richard Wiley of the Wiley Rein law firm, Ripley also explained more visions for the Tribune Media acquisition. He said the alliance will help us expedite 3.0 for a national rollout.

Ripley also acknowledged that the Tribune deal may involve some divestitures, although he repeated his stance that there is no competitive reason to divest stations.

Responding to Wileys question about the widely held opinion that Sinclair supports politically right-wing positions, Ripley explained that, Some of our shareholders have a conservative bent, but that doesnt define what Sinclair is.

If we were as conservative as were accused of [being], our success wouldnt be as great as it is, he insisted. Its about having broad appeal to our audiences.

He also described plans to focus Sinclairs local sales into a more marketing-driven organization, but offered no details.

As for the viewership cap and the UHF discount, Ripley said that, There is no other industry regulated by the FCC that has a cap.

The usefulness of the cap no longer makes sense, he said. But he waffled at Wileys question about buying more stations.

Its a commercial inevitability, Ripley said. If we dont do it, someone else will.

Related: Station Groups See SVOD Promise in an ATSC 3.0 World

International Agenda?

Citing Sinclairs acquisition and deals with antenna maker Dielectric and Acrodyne Industries, Ripley said that the company intends to expand its role on the equipment supply side of the business. In particular, Acrodynes single-frequency network (SFN) technology can expand the reach of broadcast stations using several transmitters simultaneously.

In response to a question from B&C about Sinclairs investment in Saankhya Labs, a chipmaker in India that has developed ATSC 3.0 chipsets to power consumer devices, Ripley described the goal as expanding use of Saankhyas mobile technology. He said that company was an ideal fit because it has a major presence in India, which is perfect for 3.0, especially because the UHF spectrum there is underused.

He said that the ATSC 3.0 chips from Korea are TV-only oriented, and that Saankhyas technology is a way for us to accelerate the marketplace for other servic

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