Sinclair Ready For Deals CEO Ripley Tells Media Institute

Sinclair Broadcast will sell anything in its portfolio -- at “the right price” -- so it can close the gap between its valuation and share price, CEO Chris Ripley told The Media Institute during a luncheon Tuesday. Ripley also predicted that generative AI eventually will create most media, and said asymmetric regulation and increased competition are broadcasting’s biggest obstacles. “Unfortunately, for our industry, we can't seem to get out from underneath some of these old regulations,” Ripley said. “There really isn't any reason for that to be, besides that's the way it always was.”

Ripley did not comment on media reports that Sinclair engaged a broker and seeks selling 60 of its 85 stations. However, he admitted his board tasked him with fixing the “massive gap” between Sinclair's value and stock price, “otherwise I’ll be out of a job,” he said. “If someone wants to buy anything in our portfolio for the right price, you know, it will transact.” Ripley said that the FCC's blocking of recent broadcast deals has chilled transactions and discouraged new investment in the industry. Still, Sinclair must act despite the unfriendly conditions. “We don’t choose [the regulatory environment], we just live in it,” he said.

Because broadcast companies are a fraction of the size of the less regulated media outlets and tech companies they compete with, they shouldn’t be regulated, Ripley said. Requirements that broadcast markets have eight voices and four independently owned top four network stations aren’t economically viable “nor even needed from society’s perspective,” he said. The newspaper industry, facing much less regulation than broadcast, naturally gravitated toward a model with one or two big players per market, Ripley said. “That’s what would happen in an unregulated market,” he said. The ownership cap and other regulations prevent broadcasters from achieving the scale they need to compete with much larger companies, he said. The same need for scale is driving larger media companies, such as Paramount Global and Warner Bros. Discovery, to run “around with their hair on fire” seeking merger partners, Ripley said.

“Cracks” in the existing business model is one reason broadcasters must seek new revenue streams, such as ATSC 3.0 datacasting, Ripley said. He urged the FCC to facilitate the 3.0 transition, and treat streaming services such as YouTube TV as MVPDs. Having some sporting events air exclusively on streaming services is “something that, governmentally, societally, we should be looking at,” Ripley said. Moving sports to streaming services “disenfranchises” viewers who lack access to those services. “If you are a sports rights holder, you're actually hurting your brand. You're hurting your long-term viability.”

Ripley said passage of the Journalism Competition and Preservation Act would be “nice” and help broadcasters, but Congress also must prevent Artificial Intelligence from exploiting broadcast content. AI will soon replace Internet search engines, he said. “If all we do is pass the JCPA ... [we] ... will be solving a problem that was first started 20 years ago,” Ripley said.

“Hype” around generative AI is overblown sometimes, but “not when it comes to media,” Ripley said. Generative AI is good at creating media, and most consumers will eventually watch AI-created news, movies and TV shows, Ripley predicted. He said that Sinclair’s thinking on AI and local news centers on gathering information that AI can consume and use for creation. “When it comes to everyday media, I don't see why AI won’t take it all over,” Ripley said. He added, industries drive toward efficiency and providing great products at the lowest cost. “If that's what you're optimizing for, then AI is going to be a major part of your solution.”