Published: Tue, July 17, 2018
Culture&Arts | By Dora Pope

FCC has 'serious concerns' about Sinclair merger it helped engineer

FCC has 'serious concerns' about Sinclair merger it helped engineer

Pai said he had asked colleagues to vote to send the "certain proposed divestitures for a hearing in front of an administrative law judge".

If the merger were to go through as proposed, Sinclair would have access to 72 percent of the TV viewing households in the U.S., exceeding a national ownership cap of 39 percent.

Pai said Monday he found those arguments persuasive.

Sinclair's executive vice president, Barry Faber, didn't return an email and telephone call seeking comment. But a number of the owners of the stations that would be spun off have close ties to Sinclair, which critics said would allow Sinclair to stay in control of the stations it sold - divestitures that appeared created to evade the FCC's rules. Perhaps most auspiciously, Pai approved rules previous year that allowed broadcasters to own own far more stations than they were allowed previously, a regulation that seemed designed, to a suspicious degree, to help Sinclair. That provision allowed Sinclair to move forward with its Tribune merger. He added that though there's chance Sinclair could work to get the merger approved, "our legal contacts believe Pai went far enough to suggest the deal is at more serious risk". Seven stations would go to 21st Century Fox.

"Republicans, Democrats and those that are concerned about the concentration of media power should join me in commending Chairman Pai", Christopher Ruddy, chief executive officer of Sinclair competitor Newsmax Media, said in an emailed statement. The initial merger sought to build the biggest television company in America, with reach into 233 stations across 108 markets.

"This request appears to be part of many Democrats' attempt to target one particular company because of its perceived political views, an effort that dates all the way back to 2004 when Ranking Member Pallone, Ranking Member Cummings, and other Democrats demanded that the FCC investigate Sinclair based exclusively on the content of a documentary they didn't like and that hadn't even aired". The deal would mean Sinclair's stations would cover a majority of the country The deal requires approval from the FCC because it involves broadcasting licenses and local stations.

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Pai's draft proposal that the divestitures be reviewed characterized the Chicago spinoff as "potentially involv [ing] deception", according to two of the people.

Earlier this year, 15 members of the Coalition to Save Local Media, including Common Cause, sent a letter to the FCC raising alarm about "sidecar arrangements" that Sinclair planned to use to make the merger appear to comply with federal audience-cap rules, even though the company would continue providing all services to the "sold" stations.

Critics of the deal say it could limit the number of independent voices on the air, after news reports of programming on Sinclair-owned stations being dictated from its Maryland corporate headquarters.

Jessica Rosenworcel, the lone Democrat on the commission, hailed Pai's decision.

In other words, an approved hearing order kicks off "a lengthy administrative process often viewed as a deal-killer", Politico pointed out. "With this hearing designation order, the agency will finally take a hard look at its proposed merger with Tribune", she said in a statement.

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