APOLLO P’MOUNT HURDLE FCC station rule

Apollo Global Management and Sony’s bid to buy Paramount Global faces significant hurdles to get the deal past Democratic-led federal regulators amid antitrust concerns, The Post has learned.

Paramount — which ended exclusive merger talks with Skydance Media last Friday — owns the CBS network, its Hollywood studio and 28 local stations, including 17 CBS affiliates in markets including New York, Chicago and Los Angeles.

Apollo, which teamed with Sony to make a $26 billion allcash bid for the Shari Redstone-controlled media conglomerate, faces an uphill fight to circumvent the FCC’s 39% cap on the reach by local affiliates should the merger be approved by Paramount’s board, multiple sources told The Post.

Apollo owns TV channels that reach 11% of US households through its stake in cable company Cox Media Group, a media-investment banker told The Post.

Meanwhile, Paramount’s local stations account for a 39% reach, according to the banker — putting the total of the combined company well above the FCC’s threshold.

“Competitors may point out that Apollo’s ownership will exceed the 39% national ownership cap, which in itself is a regulatory anachronism but is nevertheless a real thing at the FCC,” Adonis Hoffman, who served as the agency’s senior legal adviser and chief of staff from 2013 to 2015, told The Post.

Apollo, however, is banking on an arcane FCC loophole called the “UHF Discount” — which cuts in half the percentage of households counted by stations with channels in the UHF bandwidth — to get below the cap, a source familiar with its thinking said.

Under the discount, passed in 1985 and revoked in 2016 before being reinstated the following year by then-FCC Chair Ajit Pai, a Republican, Paramount reaches only 25% of households and Cox about 5%, according to the investment banker.

Discount ‘outdated’

But there is a significant chance the FCC scraps the UHF Discount because Joe Biden-nominated Chair Jessica Rosenworcel believes it is outdated, several sources said.

Should the FCC get rid of the UHF Discount, the agency could ask for Apollo or Paramount to divest some of the channels to get below the threshold instead of outright blocking the merger, sources said.

Currently, there are overlaps in three of the markets in which Paramount and Cox serve, the banker said.

The Apollo and Sony bid could also face scrutiny from the Committee on Foreign Investment in the US, which might not be comfortable with a Japanese firm owning CBS.

There is further worry that the Federal Trade Commission could step in to prevent Sony, which has its own film division, from scooping up a second movie studio.

Apollo has already had a potential merger between Standard General and broadcast-station owner Tegna essentially killed by Rosenworcel.

The firm helped finance the bid by Standard General, but the FCC decided last year not to vote on the proposed merger, leaving it to wither.

Rosenworcel was uncomfortable with a private-equity firm gaining such a big foothold in television broadcasting, sources said.