Sinclair announces plan to buy Chicago’s WGN-TV outright

Sinclair Broadcast Group wants to buy the Chicago broadcaster WGN-TV in a bid to win Federal Communications Commission approval for its stalled proposal to acquire Tribune Media. The move, which Hunt Valley, Md.-based Sinclair announced Wednesday, ends the disputed plan to sell off Tribune Media’s WGN-Channel 9 to a Maryland auto dealer while operating it through a services agreement. Sinclair also is withdrawing similar “sidecar” agreements for stations in Dallas and Houston that were part of its proposed $3.9 billion acquisition of Chicago-based Tribune Media. FCC Chairman Ajit Pai issued a statement Monday expressing “serious concerns” about certain station divestitures in the deal and suggesting the matter be referred to an administrative law judge for a hearing. The February agreement to sell WGN for $60 million to a newly formed company headed by Steven Fader, a longtime business associate of Sinclair Executive Chairman David Smith, is reportedly at the center of Pai’s concerns. The WGN services agreement would have kept Sinclair in charge of everything from programming to ad sales while giving it an option to buy back the station for the same price, subject to adjustments, within eight years. Sinclair now plans to buy WGN outright. “As a result of the withdrawal of the application relating to WGN, Sinclair will simply acquire that station as part of the Tribune acquisition, which is, and has always been, fully permissible under the national ownership cap,” the company said Wednesday in a

news release. Tribune Media spokesman Gary Weitman declined to comment Wednesday. Sinclair agreed to buy Tribune Media’s 42 TV stations in May 2017, creating what would be the largest ownership group in the United States with 233 stations. Sinclair owns Little Rock’s KATV, an ABC affiliate. As the deal dragged on and opposition mounted, Sinclair agreed to sell off a number of stations to comply with FCC ownership restrictions. Several of those divestitures would have allowed Sinclair to control the stations in “violation of the law,” Pai said Monday. “What was noteworthy about this hearing designation order is that it was pretty specific regarding what defects it perceived needed to be cured,” Robert McDowell, a Washington-based communications attorney and former Republican FCC commissioner, said Wednesday. “The [hearing order] could have the effect of pushing Sinclair into accepting terms it was resisting previously.” The proposed merger has faced opposition over concerns that Sinclair’s conservative editorial views would unduly influence local news at Tribune’s stations. Others have objected on the basis of media concentration. Pai, whom President Donald Trump appointed chairman in January 2017, is reportedly under investigation by the FCC’s inspector general over whether he relaxed ownership rules specifically to benefit Sinclair’s bid to acquire Tribune Media. Sinclair executives hoped to receive FCC approval and close the deal by early in the third quarter, but Monday’s plan to refer the application to an administrative law judge could delay or even derail the acquisition. By amending its application yet again, Sinclair is hoping to get the Tribune Media acquisition back on track. In addition to WGN, Sinclair is withdrawing proposals to sell KDAF-TV in Dallas and KIAH-TV in Houston to Cunningham Broadcasting Corp., deals that also included sidecar agreements. Instead, Sinclair is planning to place those stations in a divestiture trust to be sold following the closing of the Tribune Media acquisition. “We call upon the FCC to approve the modified Tribune acquisition in order to bring closure to this extraordinarily drawn-out process and to provide certainty to the thousands of Tribune employees who are looking for closure,” Ronn Torossian, a spokesman for Sinclair, said in the news release. Tribune Media was created in 2014 when the former Tribune Co. spun off its newspaper holdings, including the Chicago Tribune, into a separate company, now called Tronc.