Federal Communications Commission (FCC) chairman Ajit Pai has announced he will slow a massive merger between Sinclair Broadcast Group and Tribune Media, striking a fatal blow to the acquisition bid.
The decision comes as Pai is facing an investigation into allegations that he relaxed certain broadcast ownership rules to benefit Sinclair, a claim which he denies.
“Based on a thorough review of the record, I have serious concerns about the Sinclair/Tribune transaction,” Pai said in a statement Monday. “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.”
Pai added that the FCC would require Sinclair to explain its divestitures before a judge in order to move forward with the merger, effectively killing the deal in the process.
The $3.9 billion Sinclair-Tribune merger would have allowed conservative-leaning Sinclair, the largest owner of local television stations in the country, to commandeer an astounding 72 percent of the market, far exceeding the federally regulated 39 percent cap currently in place. As the Washington Post noted Monday, Sinclair attempted to maneuver around that hurdle by “spinning off several stations,” however, as Pai stated, Sinclair would maintain close ties with those stations, and would be able to control them regardless.
For its part, Sinclair claimed it pursued the merger with good intent and had not attempted to undermine current regulations.
“While we understand that certain parties which oppose the transaction object to certain of the buyers based on such buyers’ relationships with Sinclair … at no time have we misled the FCC in any manner whatsoever with respect to the relationships or the structure of those relationships proposed as part of the Tribune acquisition,” a spokesperson stated Monday evening.
The spokesperson said the company had no plans to drop the proposal, and would “resolve any perceived issues” before a judge. “The proposed merger of Sinclair Broadcast Group and Tribune Media will create numerous public interest benefits and help move the broadcast industry forward at a time when it is facing unprecedented challenges,” they said.
Pai’s decision to administratively block the Sinclair merger is curious given he, himself, is currently the focus of an investigation by the FCC’s inspector general over allegations he purposely eased certain regulations to aide Sinclair in its acquisition.
Last year, Pai relaxed a rule prohibiting the number of stations a media company was allowed to own. The rule was the result of a policy reversal implemented under President Obama’s FCC in 2016. At the time, the FCC claimed rules first put in place in 1985, which allowed media giants to only partially count stations with weaker signals under their ownership cap, were no longer relevant due to “the 2009 conversion to digital broadcasting, which eliminated the differences in station signal strength,” Fortune reported. The FCC subsequently reversed the 1985 rules.
Pai once again reversed that decision in April 2017, stating the new regulations were too stringent and had left certain companies previously in compliance with the ownership cap in violation of it. “Today, the FCC is wiping the slate clean,” he stated.
Former Democratic commissioner Mignon Clyburn rejected that decision, according to Recode, warning that several media companies had already expressed their intent to purchase additional stations under such a policy, including Sinclair. The rules change moved forward regardless.
Again, in October 2017, the FCC under Pai’s leadership moved to ease regulations restricting the number of television and radio stations media companies like Sinclair were allowed to control in a market, ultimately paving the way for Sinclair to propose its $3.9 billion acquisition of Tribune media. Pai defended the rule rollback by claiming it would “open the door to pro-competitive combinations that will strengthen local voices.”
By the end of 2017, according to The New York Times, the FCC inspector general had launched an internal investigation into those rule easements, seeking to discover whether Pai and his aides “had improperly pushed for the rule changes and whether they had timed them to benefit Sinclair.”
Pai called the allegations “baseless.”
“For many years, Chairman Pai has called on the FCC to update its media ownership regulations. The chairman is sticking to his long-held views, and given the strong case for modernizing these rules, it’s not surprising that those who disagree with him would prefer to do whatever they can to distract from the merits of his proposals,” an FCC spokesman stated at the time.
Sinclair came under fire earlier this year after Seattle-based ABC affiliate KOMO-TV, which Sinclair owns, reported its parent company was forcing anchors to read one-sided scripts denouncing “fake news” — President Trump’s favored term for any news reports with which he disagrees — in an attempt to undermine its competition.
The script, one of the many “must-run” segments Sinclair requires its stations to air regularly, was highly critical of non-Sinclair media outlets and was run on nearly every single Sinclair-owned station.
Other “must-run” segments distributed by the conservative media group feature misinformation and pro-Trump propaganda, commentary critical of the ongoing Russia investigation, and “expert” interviews with the individuals like former Deputy Assistant to the President Sebastian Gorka, who propagate the myth of the so-called “Deep State,” a supposed cabal of Democratic political figures attempting to overthrow the government from within.