Under investigation by the FCC's inspector general for being too close to the Sinclair Broadcast Group's deal to buy dozens of Tribune Media-owned local TV stations, FCC Chairman Ajit Pai has apparently had to scrap the deal by sending it for "further review", an effective death knell for the deal.
Sinclair Broadcast Group's acquisition of Tribune Media Company has run into a major roadblock at the Federal Communications Commission.
FCC Chairman Ajit Pai said he won't approve the Sinclair/Tribune acquisition as it's currently structured, saying Sinclair's plans for divested stations would violate the law. Pai is recommending that the merger be reviewed by an administrative law judge, a move that could ultimately kill the deal.
Pai's decisions came after months of pressure from Democratic lawmakers, consumer advocacy groups, and industry lobby groups. Pai has been repeatedly accused of making regulatory changes that benefit Sinclair; the FCC's inspector general in February agreed to investigate whether Pai has improperly coordinated with Sinclair on rule changes.
Pai's FCC previously rolled back broadcast TV station ownership limits, a move that at the time gave Sinclair a better chance of buying more stations. But Pai's statement today said that the FCC can't approve Sinclair's plan for Tribune:
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. When the FCC confronts disputed issues like these, the Communications Act does not allow it to approve a transaction. Instead, the law requires the FCC to designate the transaction for a hearing in order to get to the bottom of those disputed issues. For these reasons, I have shared with my colleagues a draft order that would designate issues involving certain proposed divestitures for a hearing in front of an administrative law judge.
Pai's statement did not say which station divestitures would break the law. Reuters reported that the draft order says, "Sinclair's actions here potentially involve deception" in its application to acquire Tribune and divest WGN, a TV station in Chicago. The draft order also said that "this question of misconduct" bears not just on the WGN transaction but also on the entire merger application, Reuters wrote.
Critics of the merger say it could raise TV prices for consumers and reduce viewpoint diversity in local news. Sinclair also needs Justice Department approval of the deal.
I've talked multiple times about how Sinclair Broadcasting Group is Trump's state media controlling a surprisingly large amount of local news stattions across the country. With the acquisition of Tribune's forty-plus stations, Sinclair would far and away be the largest single owner of local broadcast TV stations in America.
But now that deal is in serious trouble. However, that also means that the scores of stations that Sinclair currently owns will continue to broadcast Trump propaganda, and while the deal may be delayed, I won't honestly believe the deal is dead until Sinclair and Tribune both drop their merger plans.
It's definitely a win for now, but the reality is a six months or a year from now, this deal may quietly go through, especially if the Republicans still control the House and/or Senate.