FCC Chairman Ajit Pai announced Monday he has “serious concerns” about Sinclair Broadcast Group’s acquisition of Tribune Media, saying he would send the transaction through a lengthy administrative process often viewed as a deal-killer.
As originally proposed in May 2017, the $3.9 billion deal would see conservative-leaning Sinclair, already the largest U.S. TV station owner, gobble up 42 Tribune stations in key markets like New York and Chicago, adding to its existing footprint of more than 170 stations and giving the company access to nearly three-quarters of U.S. households.
But the regulatory review dragged on for more than a year, as Sinclair revised the deal several times, offering to sell off 21 stations in an effort to gain government approval. Critics took issue with some of the proposed sales, which were so-called sidecar arrangements that would allow Sinclair to keep a stake in the revenue and programming of the spun-off stations, as POLITICO reported on May 30. Another two of the sales would have been to a company with close ties to Sinclair.
Pai said “certain proposed divestitures” were a sticking point for the agency.
“Based on a thorough review of the record, I have serious concerns about the Sinclair/Tribune transaction,” the chairman said in the statement. “The evidence we’ve received 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.”
FCC officials said one problematic deal was the plan to sell Chicago station WGN to Steven Fader, a Maryland business associate of Sinclair Executive Chairman David Smith who oversees car dealerships. Others that raised alarm were the deals to sell stations in Dallas and Houston to Cunningham Broadcasting, a company with close ties to the Smith family.
The FCC’s decision is a significant blow for Sinclair, which has been been a frequent target for Democrats and liberal groups disturbed by reports that it favors President Donald Trump in its coverage via “must-run” segments pumped to its network of stations.