Tuesday, July 17, 2018

FCC chair announces 'serious concerns' about Sinclair-Tribune merger; could signal death knell for deal

"FCC Chairman Ajit Pai announced Monday he has "serious concerns" about Sinclair Broadcast Group's acquisition of Tribune Media, saying he would send the transaction through a lengthy administrative process often viewed as a deal-killer," Margaret McGill reports for Politico.

Sinclair is already the nation's largest owner of television stations, and with the $3.9 billion purchase of 42 Tribune stations, would add to its existing 173 stations to give the company access to almost three-quarters of U.S. households. The company owns many small-market stations.

Sinclair has offered to sell 21 stations to gain government approval, but the proposed sales would still have allowed Sinclair to maintain some control over the stations' revenue and programming. Pai said in a statement that that was a problem for the FCC: "Based on a thorough review of the record, I have serious concerns about the Sinclair/Tribune transaction . . . 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's move is not just a significant blow for Sinclair, but a surprising move for the Trump-appointed FCC chair. Sinclair has been criticized by Democrats for requiring stations to run editorial content favoring President Trump. And Pai had previous indicated a willingness to smooth the way for the Sinclair merger, reviving a regulatory loophole known as the UHF discount that would have allowed Sinclair to duck federal limits on media ownership.

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