FCC chair has ‘serious concerns’ about Sinclair-Tribune merger
The Washington Post
WASHINGTON — Sinclair Broadcasting’s bid to create a conservative television giant appeared to be in doubt on Monday after federal regulators highlighted “serious concerns” with the proposed acquisition of Tribune Media, which seeks to push the boundaries of control of the U.S. broadcast market.
The chairman of the Federal Communications Commission, Ajit Pai, said that he intends to send key parts of the $3.9 billion deal to be reviewed by an administrative law judge, which is typically the first step the FCC takes when it seeks to block a deal.
The sudden clampdown on the Sinclair deal marks a shift from Mr. Pai’s previous moves to deregulate the broadcast industry. Mr. Pai’s statement is the first time the FCC, largely seen as friendly toward TV station consolidation, has raised a concern over the transaction.
Sinclair’s proposed merger would give the conservative broadcaster unprecedented grip over American TV screens. Its original proposal, if approved, would grant Sinclair — already the largest owner of local television stations in the United States — access to 72 percent of television households in America, far surpassing a national ownership cap of 39 percent. That level of dominance has prompted an outcry from consumer and media groups. The FCC’s national ownership cap limits the reach of any one broadcast company, in an effort to ensure enough independent voices can thrive on the airwaves.
To get beneath the cap, Sinclair had proposed spinning off several stations. The combined company would still control 215 stations, reaching 62 percent of households in 102 television markets. Also, a number of the owners of the stations that would be spun off have close ties to Sinclair, which critics said would allow Sinclair to stay in control of the stations it sold — divestitures that appeared designed to evade the FCC’s rules.
Mr. Pai said Monday he found those arguments persuasive.
“The evidence we’ve received,” said Mr. Pai, “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.”
Sinclair didn’t respond to requests for comment. In the past, Sinclair chief executive Chris Ripley has said the deal will create “a leading broadcast platform with local focus and national reach.” Sinclair’s stock ended down more than 11 percent Monday. Tribune Media’s stock sank as much as 18 percent.
Sinclair’s political leanings highlight the political undertones to the deregulation Mr. Pai has spearheaded.
Sinclair is a supporter of President Donald Trump, and the acquisition of dozens of Tribune media stations would give conservative media a wider platform. But Mr. Pai has faced criticism from lawmakers and consumer groups for approving policy changes that could benefit Sinclair as it seeks to close its deal.