ROH Owners Sinclair Broadcast Group Face FCC Roadblock Over Tribune Acquisition

Brunilde Fioravanti
Luglio 17, 2018

"So amusing to watch Fake News Networks, among the most dishonest groups of people I have ever dealt with, criticize Sinclair Broadcasting for being biased", Trump tweeted in April. Tribune plunged as much as 18 percent, with frequent pauses for high volatility, for the biggest intraday drop since January 2017.

"The evidence we've received suggests that certain station divestitures that have been proposed to the FCC would allow Sinclair to control those stations in practice, even if not in name, in violation of the law", Pai said in the statement. Pai said he had asked his three fellow commissioners to vote to send the $3.9 billion deal to a hearing.

The FCC is now calling for a hearing to "get to the bottom of the disputed issues", Pai said.

Sinclair is known as a conservative-leaning owner of local stations, which are normally bastions of objectivity more focused on local news than national politics.

But some of those sales would still leave Sinclair with a degree of control over the stations' operations. The deal has faced strong scrutiny by Congress, the FCC, and the Department of Justice (DOJ).

"Based on a thorough review of the record, I have serious concerns about the Sinclair/Tribune transaction", FCC chairman Ajit Pai said in a statement Monday.

Sinclair, the top US television broadcast group, did not respond to numerous requests for comment.

"Too many of this agency's media policies have been custom built to support the business plans of Sinclair Broadcasting", Rosenworcel said in an email statement. Gary Weitman, a Tribune spokesman, declined to comment.

In other words, an approved hearing order kicks off "a lengthy administrative process often viewed as a deal-killer", Politico pointed out.

At issue, Pai said on Twitter, is whether Sinclair's proposed divestitures of some stations are in reality a ploy for the company to maintain control of the stations.

Pai's announcement was particularly surprising given the fact that last August, the FCC seemingly made it easier for Sinclair to complete the merger.

Sinclair executives hoped to receive FCC approval and close the deal by early third quarter, but Monday's plan to refer the application to an administrative law judge is likely to substantially delay or even derail the acquisition. "Historically, Sinclair has been very successful pushing the edge of the envelope with the FCC".

Some analysts see such a move as a deal killer.

Democratic lawmakers and some of the company's Republican rivals have alleged that the FCC has given Sinclair preferential treatment.

"Designating a transaction for a hearing is the FCC's first step toward denying the deal", Matt Wood, policy director for the policy group Free Press, said in an emailed statement. Sinclair is a supporter of President Donald Trump, and the acquisition of dozens of Tribune media stations would give conservative media a wider platform.

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". It would create one of the largest broadcasting companies in the country and further consolidate the power of Sinclair, which owns almost 200 local stations throughout the US.

If the merger were to go through as proposed, Sinclair would have access to 72 percent of the TV viewing households in the USA, exceeding a national ownership cap of 39 percent.

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