FCC Issues Hearing Order Pushing Sinclair-Tribune Deal Closer to the Brink

WASHINGTON — On Thursday, the Federal Communications Commission issued its Hearing Designation Order (HDO) related to the Sinclair Broadcast Group’s proposed merger with Tribune Media.

The HDO, which sends Sinclair’s proposed divestiture plan to a judge for an administrative review hearing, is often the FCC’s first step toward denying a deal. The Communications Act requires the agency to give merger applicants a shot to make their case or abandon a proposed deal before the FCC moves to withhold approval.

As originally proposed, the Sinclair-Tribune deal would have given the broadcast giant control of more than 233 local TV stations reaching 72 percent of the country’s population, far in excess of congressional and FCC limits on national and local media ownership.

In the HDO, the FCC challenges Sinclair’s proposed divestiture plan in which control of several stations would be transferred to shell companies set up by the broadcaster. “The record raises significant questions as to whether those proposed divestitures were in fact ‘sham’ transactions,” the HDO reads. The FCC also suggests that Sinclair has “attempted to skirt the Commission’s broadcast ownership rules” to complete the merger.

The FCC also notes a “potential element of misrepresentation or lack of candor” in Sinclair’s proposals and raises questions as to whether the deal is in the public interest.

Free Press Deputy Director and Senior Counsel Jessica J. González made the following statement:

“Sinclair’s merger plans are all but dead. The FCC isn’t biting on Sinclair's latest attempt to make its takeover of Tribune more palatable. This company has been misleading the FCC for years with front groups and shady arrangements to control local TV stations, undercut competition and evade FCC rules.

“The agency’s order makes it clear that Sinclair’s hopes of success are in deep trouble, with Republican and Democratic commissioners uniting to raise serious questions about the deal. We thank Chairman Pai and all of the FCC commissioners for holding Sinclair accountable. Commissioner Rosenworcel deserves particular praise for questioning this deal from day one.

“The FCC’s order strongly suggests that Sinclair lied to the agency.  If the judge in fact finds that Sinclair attempted to deceive the FCC, it could be grounds for the Commission to revoke all of Sinclair’s licenses, not just the ones pertaining to this merger. Under the law, lack of candor suggests Sinclair is unfit to hold any broadcast licenses.

“Sinclair’s shell-company scheme led the FCC to question the proposed merger, as it should. Free Press has repeatedly called Sinclair’s bluff about this highly suspicious practice. It’s encouraging that the FCC is acknowledging the facts and listening to the thousands of people who have spoken out against the deal.

“The commissioners’ unanimous support for a hearing makes it clear that Sinclair's 11th-hour attempt to fix the deal won’t improve the prospects for this ill-conceived merger. The broadcaster has a well-documented history of lying to the FCC. Approving any license transfers to such a disgraceful entity would harm the public interest.

“The FCC's conclusion that these spinoffs to shell companies would be sham divestitures is exactly right. But Sinclair uses identical sham arrangements in dozens of markets. We call on the FCC to review those and all other such shady ownership deals.”