When ABC pulled Jimmy Kimmel off the air last week after his comments about Charlie Kirk’s assassination, the obvious way to understand the story was that it was an attack on free speech. Federal Communications Commission Chairman Brendan Carr had, after all, publicly declared that ABC could do things “the easy way or the hard way” with regard to Kimmel, and then implied that local ABC affiliates might face “fines or license revocation” if nothing was done.
Yet Kimmel’s suspension also reflected something else: a flex by the broadcast-media companies Nexstar and Sinclair, which, over the past two decades, have acquired hundreds of local TV stations, and together own roughly 20 percent of all ABC affiliates. Within hours of Carr’s comments, Nexstar and Sinclair announced that they would be taking Jimmy Kimmel Live off the air. Not long after, ABC said that it was suspending the show “indefinitely.”
Local TV stations used to be owned by small independent companies or by the networks themselves. But today, about 40 percent of all local stations are owned by the three biggest broadcast-station groups, Nexstar, Sinclair, and Gray. That consolidation has given them more leverage over the networks than local stations once had. So when ABC acceded to their desire to take Kimmel off the air, it might well have seemed to them like evidence that the balance of power had shifted permanently in their favor.
They were, however, wrong. When ABC brought Kimmel back this week, both Nexstar and Sinclair refused to air the show, and put on local programming instead. In doing so, they effectively chose to play a game of chicken with ABC, and yesterday, both Sinclair and Nexstar admitted defeat in that game and put Kimmel’s show back on the air. Broadcast-station groups may be far more powerful than they once were, but in the end, the network remains the boss.
A look at the economics of the standoff helps explain why. Although losing potential Kimmel viewers in the markets served by Sinclair and Nexstar put ABC in a tight spot with advertisers that expect a minimum number of viewers, the boycott was more costly to the broadcast stations, which have drawn many fewer viewers this week with their replacement programming (typically more local news, which they’ve had to pay to produce) than they would have with Kimmel—particularly now, when millions more people are tuning in as a result of the controversy. Late-night TV shows are far less popular than they used to be, but Kimmel still pulls in 1.6 million viewers on an average night and, according to the ad-data provider iSpot, has generated $70 million in ad revenue this year.
Sinclair and Nexstar may be potent media players, but they would have run into serious problems if they had preempted Kimmel’s show for an extended period of time. The terms of the contracts that affiliates sign with the networks are confidential, but they typically limit the number of times a station can refuse to air a network show. When a station violates its contract, a network can inflict both financial penalties and other problems by denying the station some of its programming.
In ABC’s case, its most dire threat would have been to pull college football and Monday Night Football from Sinclair and Nexstar stations. That would be painful to local stations; football is perhaps the most valuable property they have. “You can’t watch Oklahoma-Texas on our station this Saturday because we think it’s more important to not show our viewers Jimmy Kimmel” was not a message that was going to win over viewers, even conservative ones.
Worse, if viewers hadn’t been able to watch college football on their local ABC station, they could have always tuned in to Disney’s ESPN app. Viewers who couldn’t watch Kimmel on their local ABC station this week were able to find him on DirectTV, Disney+, and Hulu. The longer the standoff continued, in other words, the more incentive viewers would have had to seek out alternatives, and the clearer it would have become that they don’t actually need to watch broadcast TV to watch most of what’s on traditional TV.
In that sense, the controversy risked accelerating the already inevitable move from broadcast and cable to streaming. And that would obviously have been more costly to Sinclair and Nexstar than to Disney, because Disney collects the revenue from its streaming services.
When the stations continued the boycott this week, then, they turned a successful bluff into an overplayed hand, something they seem to have realized after only a few days. Whatever the benefits of appeasing the FCC and Donald Trump, the costs of rejecting Kimmel were soon going to be dwarfed by the costs of losing viewers. So they caved, called it a victory, and put the show back on the air.
The post Nexstar and Sinclair Lost Their Game of Chicken appeared first on The Atlantic.
