Justice Department looks at Sinclair, Tribune ad sales

The Justice Department is investigating whether communications between advertising teams at TV station groups like Sinclair Broadcast Group and Tribune Media violated antitrust laws, a source familiar with the probe confirmed to Variety.

The Justice Department’s investigation, first reported by The Wall Street Journal, grew out of the Antitrust Division’s examination of Sinclair’s proposed merger with Tribune Media, the source said. The $3.9 billion deal, which would create a broadcast giant with more than 200 stations, is now in doubt, after the FCC voted last week to send the merger to an administrative law judge for review.

A spokesman for Tribune Media declined to comment. A Sinclair spokesman did not return a request for comment, but told the Journal, “It is our policy not to comment on a potential investigation. It is our understanding that this is not specific to Sinclair, but focuses on the larger broadcast industry.”

A Justice Department spokesman had no comment.

At issue is whether communication between advertising sales teams led to higher rates for advertising spots.

The Justice Department never gave the green light to Sinclair’s merger, despite speculation that approval was imminent.

Sinclair’s merger with Tribune Media faces an Aug. 8 deadline for either side to walk away from the deal.

If they proceed with their merger plans, they would likely face months, if not a year, of proceedings before an administrative judge. Other companies who have faced such a prospect have abandoned their plans.

The FCCcontends that Sinclair may have misrepresented its plans to divest stations as a way to comply with media ownership rules. The commission is asking the judge to determine whether a series of proposed station sales were in fact “sham” transactions to skirt the rules.

Sinclair has denied that it misled the FCC.