FCC head has 'serious concerns' with Sinclair-Tribune deal

NEW YORK — The chairman of the Federal Communications Commission raised "serious concerns" Monday about Sinclair's $3.9 billion deal to buy Tribune's television stations.

Sinclair initially bid to buy Tribune Media and its 42 TV stations, including KCPQ-TV in Seattle, as well as KTLA in Los Angeles and WPIX in New York. Sinclair currently owns KOMO-TV in Seattle. To address potential antitrust concerns, Sinclair said it would sell stations to several buyers.

KCPQ was reportedly part of one of those groups to be sold, with Twenty-First Century Fox agreeing to buy it and six other stations. There was no immediate word on what, if anything, Monday’s announcement would mean for that sale.

Other stations, however, were reportedly to be sold to entities that would still allow Sinclair to control them through “joint sales agreements.”  FCC Chairman Ajit Pai said Sinclair might still be able to operate the stations "in practice, even if not in name." One potential buyer is the Cunningham Group, which has ties to Sinclair's founding family.

Pai is ordering a hearing on Sinclair's proposed acquisition of Tribune. Even ordering a hearing could stop a potential deal. The last deal an FCC hearing blocked was a 2002 merger of satellite TV companies DirecTV and Echostar.

Here’s Pai’s statement:

“Based on a thorough review of the record, I have serious concerns about the Sinclair/Tribune transaction. 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.”

Tribune Media responded Tuesday with the following statement:

“Tribune Media was disappointed to learn that the Chairman had circulated an order designating certain issues for consideration by an Administrative Law Judge. It will review the FCC’s hearing designation order when released and expects to work with the FCC to explore ways to address the concerns identified. Until we have reviewed the order it is difficult to explain the potential issues it might create for the transaction. Fortunately, Tribune's operations have been strong in 2018 and our team has done a terrific job of maximizing the value of the business through this extended regulatory approval process.”