Sinclair CEO: Locast is a Commercial Entity Masquerading as a Non-Profit

At the end of July, Locast, a nonprofit streaming service funded in part by AT&T Inc. and founded by a Dish Network Corp. lobbyist was sued by CBS, ABC, NBC and Fox to shut it down. On today’s Q2 Earnings Call, Sinclair Broadcast Group CEO, Chris Ripley said that they were “happy to see the networks act.”

Sinclair makes over $1 billion in retransmission revenues annually, from cable and streaming services to carry their local affiliates. A service like Locast, that provides locals to consumers for a donation, could dramatically eat into Sinclair’s revenue stream if cable, satellite, and streaming companies decide to drop their local affiliates. Satellite providers AT&T (who donated to Locast) and Dish Network have directed customers to the streaming service while is carriage disputes with affiliate owners.

While Ripley says, Locast is “not of any significance in terms of size or subscribers”, that is is “Aereo 2.0 — really a commercial entity masquerading as a non-profit.” He believes that “it should be shut down and we think that lawsuit will be the start of that process.”

Locast bears similarities to Aereo, which was launched in 2012, but shut down through a Supreme Court decision in 2014. The main difference being that Aereo was for-profit and offered a DVR service for the content.

Locast is arguing that it is well within the 1976 Copyright Act, which allows for nonprofits to operate so-called booster and translator stations that strengthen a TV station’s signal to reach antennas that otherwise wouldn’t receive the channel.

While the service relies on donations from users, they recently received a $500,000 contribution from AT&T and another $800,000 from IOT Broadband LLC, a firm owned by former Dish executive Michael Kelly. To date, Locast says it has signed up more than 250,000 users and while it’s not yet available nationwide, it is present in many of the country’s largest TV markets and reaches more than 30 million households.