FCC chairman Ajit Pai said today that he has “serious concerns” about Sinclair’s proposed merger with Tribune Media Company, which would create a uniquely enormous local TV broadcaster reaching nearly three-quarters of all US homes with TVs in them. Pai has proposed that the FCC refer select issues to an administrative law judge for a hearing “to get to the bottom” of the Commission’s concerns.
Pai was vague on the specific issues, but it sounds like they relate to just how large the combined company would be. The FCC limits local broadcasters to reaching no more than 39 percent of US TV households — albeit, with some generous exceptions. Sinclair was using those exceptions and some proposed station divestitures to claim it would reach just under the cap. But the FCC apparently isn’t buying it.
This challenge could “effectively block” the merger
In a statement made today, Pai said that for “certain” stations that Sinclair said it would sell off, the company would still remain in control of them “in practice, even if not in name, in violation of the law.” Reuters reports that, in the proposed review order, the FCC says that “Sinclair’s actions here potentially involve deception” and “misconduct.”
It’s not clear whether the FCC’s actions today will stop the merger outright. Sinclair could still attempt to correct the issues or win in court. But it certainly poses a roadblock. Representative Frank Pallone (D-NJ), ranking member of the House’s Energy and Commerce Committee, said in a statement that the review could “effectively block” the merger.
The FCC’s interference in the deal was unexpected, as for more than a year now, Pai has been criticized as playing right into Sinclair’s hands. Pai reinstated a major exception to the broadcast limit, which allowed Sinclair to essentially break the cap and argue for this deal in the first place. The FCC’s inspector general even began a probe into whether Pai had inappropriately favored the company in his actions.
Making the issue even more heated is the fact that Sinclair is a deeply conservative broadcaster and has been known to regularly force its local stations to broadcast pro-Trump commentaries, along with other sensational segments, even against the wishes of local journalists. Politico reported in 2016 that Jared Kushner, the president’s son-in-law, said privately that Trump’s presidential campaign had made a deal with Sinclair for better coverage. Sinclair said the claim was false and an offer had been made to both candidates for “extended” coverage.
Jessica Rosenworcel, the only sitting Democrat on the FCC, said she supported Pai’s proposal, but continued to criticize his earlier actions enabling the merger in the first place. “As I have noted before, too many of this agency’s media policies have been custom built to support the business plans of Sinclair Broadcasting,” she wrote. Rosenworcel said the hearing is “overdue and favoritism like this needs to end.”
The FCC told Reuters that at least one other commissioner is in support of the proposed order, meaning there are enough votes to approve it.