Sinclair Draws Scrutiny Over Growth Tactic

Federal Communications Commission rules tracing to the 1940s prohibit anyone's owning more than one TV station in a market like Columbus (OH). But Sinclair can run major aspects of all three because of an approach the FCC allowed 22 years ago that lets a company manage stations it doesn't own. Companies that outsource station management are sometimes called "sidecars."

Sinclair is America's biggest station owner and operator, thanks in part to sidecar agreements. Gannett and Tribune have proposed to expand, in part, through sidecar agreements, which have become widespread in the industry. Sinclair says such agreements are vital in competing against the Web and other new suitors for viewer attention. "It's necessary for survival because of the evolutionary nature of the competitive ad-selling marketplace," says Daivid Smith, Sinclair's chief executive. Opponents of media consolidation say broadcasters use sidecar agreements as loopholes that let them violate the spirit of FCC ownership rules, which the agency says promote "competition, localism and diversity." When one owner manages multiple stations in a market, they say, it reduces local-news quality and variety, and drives up pay-TV bills.