Sinclair Gets Slapped By FCC Chief

On Thursday the FCC sent Sinclair's $3.9 billion proposed purchase of Tribune Media Co. to an administrative hearing that could take months -- long enough to potentially kill the deal.

Ajit Pai

According to Bloomberg, the decision seemed an abrupt turnabout for Pai, a Republican chosen by President Donald Trump. Critics say he has gone out of his way to befriend Sinclair, known for its conservative views and admiration of the president. He even appeared at a Sinclair gathering in its hometown of Baltimore -- and he has mowed down media ownership rules the company opposed.

"For too long the FCC has twisted & bent its policies to serve the business plans of Sinclair Broadcasting," FCC Commissioner Jessica Rosenworcel, the agency's sole Democrat, said in a tweet Thursday. "As I've said before, this is not right. I'm glad my colleagues now agree & have supported halting the Sinclair-Tribune merger."

Pai's FCC has benefited Sinclair's business model in several ways. The agency has loosened restrictions on broadcasters owning multiple stations in a market, and eliminated a requirement for them to keep a local studio. It's also reduced scrutiny of how TV stations share services and revenue and is considering further easing broadcast ownership restrictions.

Jessica Rosenwarcel

Democrats have complained and the FCC's inspector general is probing whether Pai improperly pushed for rule changes that helped Sinclair -- an accusation the FCC called "absurd." Republicans and the industry, on the other hand, have welcomed what they say are overdue steps to eliminate outmoded regulations.

With the Tribune merger under review last August, Sinclair's Ripley told investors the "FCC has been very constructive in terms of its review."

That view from the broadcaster's corporate offices may have changed this week. On Monday, Pai, in his first public assessment of the deal, expressed criticism. The FCC order released on Thursday contained harsh language.

"There is a substantial and material question of fact as to whether Sinclair affirmatively misrepresented or omitted material facts," the FCC said as it assigned the deal, which was first proposed last year, to a hearing before an FCC administrative law judge.