FCC order says Sinclair request on Tribune may 'involve deception'

  • FCC order says Sinclair request on Tribune may 'involve deception'

FCC order says Sinclair request on Tribune may 'involve deception'

The $3.9 billion deal would have allowed Sinclair, which was already the largest station owner in the US, to add 42 Tribune stations in such major markets as NY and Chicago, giving it more than 200 stations and access to 70 percent of American households.

In February, Pai reportedly came under investigation by the FCC's own inspector general to determine whether he inappropriately pushed for rule changes that could help Sinclair's deal pass regulatory muster. The plan for Tribune-owned WGN-Ch. 9 in Chicago may be the most prominent of those deals.

That is despite the Department of Justice being comfortable with the divestiture plan. Critics say the station would essentially remain in the Sinclair fold through a services agreement that would keep it in charge of everything from programming to ad sales. "When Sinclair has been forced to sell stations during previous mergers, it has routinely sold them to family and friends and then signed agreements to control the programming on those stations".

Last year Sinclair agreed to buy Tribune Broadcasting, which would give Sinclair ownership of Tribune's locals and WGN America. Others have objected on the basis of media concentration.

The decision also rattled investors, with Sinclair's stock price sliding 5 percent and Tribune's down almost 12 percent.

In a statement (pdf) announcing a draft order that would require merger applicants to attend a hearing in front of an administrative law judge, Pai said Monday: "Based on a thorough review of the record, I have serious concerns about the Sinclair/Tribune transaction". "Any suggestion to the contrary is unfounded and without factual basis". Tribune declined to comment. But is it hiring?

Last year, the FCC had given the merger a boost when the agency's Republican majority voted to reinstate the so-called UHF discount, a loophole that allows companies like Sinclair to count just half the reach of ultra-high frequency television stations when tallying up their nationwide audience. Sinclair filed several divestiture amendments, but the proposed sidecar arrangements - a strategy the company has used in past acquisitions - may not pass muster with federal regulators.

The deal is worth $3.9 billion for Tribune Media and will add more than 40 stations including KTLA in Los Angeles, WPIX in NY and WGN-TV in Chicago to Sinclairs list of local affilites. He sent the question to an administrative hearing judge, something that can delay or even kill a deal.

Pai's move was a setback for Sinclair, a politically conservative broadcaster that's seen as friendly to President Donald Trump.

The agency's inspector general had opened an investigation into whether Pai's efforts to deregulate the broadcasting industry were meant to clear regulatory roadblocks for specifically for the Sinclair-Tribune deal.

Karl Frisch, executive director of Allied Progress, a Washington, D.C. -based liberal advocacy organization that has opposed the merger, issued a statement Monday welcoming Pai's memo. In Sinclair's case, though, it once again looked to some like divesting without really divesting - using a long-time practice of the company in having friends and business associates listed as owners of the station, while Sinclair actually ran them.

Criticism has arrived from groups including the American Civil Liberties Union, which in an FCC filing called the proposed deal "anti-competitive to its core".