Pai in deal’s face
FCC chief holds up Sinclair merger
The FCC on Thursday all but killed Sinclair Broadcasting’s $6.6 billion deal to buy Tribune Media.
The regulator, strongly questioning the management of Sinclair, a right-leaning broadcast TV powerhouse, issued an order that will require several more weeks of review — including a possible hearing before an administrative law judge.
The delay is likely to stretch beyond the end of the merger agreement on Aug. 8.
After the Federal Communications Commission’s move, Tribune said it is “assessing” all of its options.
Sinclair declined to comment.
The company ran into trouble with the regulator when it entered into unorthodox sale agreements for three TVstations.
The FCC said that Sinclair was less than transparent in making those deals.
“This case includes a potential element of misrepresentation or lack of candor that may suggest granting other, related applications by the same party would not be in the public interest,” the FCC said in its statement.
FCC Commissioner Ajit Pai on Monday had moved to block the deal, citing “serious concerns” about the deals behind the stations’ sales. Sinclair moved Wednesday to tweak the sales of the three stations.
But Pai hinted that the tweaks may not be enough to gain regulatory clearance.
Sinclair, in previously agreeing to sell Tribune station WGN-TV in Chicago and stations in Dallas and Houston, may not have been transparent about the buyers, which had ties to Sinclair, the FCC alleges.
“The real party-in-interest issues presented here includes a potential element of mis representation or lack of candor,” the FCC said.
Sinclair, for example, the FCC said, proposed to transfer WGN-TV to an individual (Steven Fader) with no prior experience in broadcasting who currently serves as CEO of a company in which Sinclair’s executive chairman has a controlling interest.
Tribune’s shares fell 4.7 percent, to $32.49, and Sinclair’s stock dropped 4 percent, to $26.30.