×
You will be redirected back to your article in seconds

Sinclair-Tribune Merger Faces Roadblock as Court Puts Hold on FCC Station Ownership Rule

A federal appeals court put on hold the FCC’s plans to restore a key media ownership rule that allowed major station groups to expand through mergers and acquisitions. The ruling could prove to be a roadblock to Sinclair Broadcast Group’s pending $3.9 billion acquisition of Tribune Media TV stations.

The D.C. Circuit Court of Appeals issued a stay to the FCC’s decision in April to restore the so-called UHF discount, which has allowed major media companies to exceed restrictions on the number of stations that they can own. The court said that the stay will give them an opportunity to review the merits of the case.

A source close to the situation noted that the temporary stay granted on Thursday extends through June 7, and the real test will come next week after the review is completed by a three-judge panel. Reps for Sinclair and Tribune declined to comment late Thursday.

By FCC regulations, no single entity can amass station holdings that reach more than 39% of the country, but for years the FCC allowed media companies to count their UHF stations as covering just 50% of their service area. That made it possible for major media companies like ION Media Networks, Univision and Tribune Media to exceed the 39% cap without having to sell off stations.

In the wake of the FCC’s decision, Sinclair Broadcast Group on May 8 announced plans to purchase Tribune, a deal that would create a broadcast colossus with more than 200 TV stations. Although the combined company would reach about 72% of the country, with the discount Sinclair would be much closer to being in compliance with the 39% ownership limit.

The UHF discount was put in place in 1985, as a nod to the fact that the signal in the UHF band was so poor compared to that of VHF stations. But the transition to digital TV eliminated those differences. Last year the FCC, then under a Democratic majority, got rid of the UHF discount amid fierce opposition from station owners.

The FCC’s balance of power changed with the election of Donald Trump. FCC chairman Ajit Pai and commissioner Michael O’Rielly voted to reinstate the discount in April, arguing that the agency’s decision last year was made in haste. Pai said that the FCC will review the discount and other ownership restrictions later this year.

A number of public interest groups, including Free Press and the Institution for Public Representation, challenged the FCC’s decision to restore the discount. In a court filing, they argued that it “reinstates a concededly obsolete rule that, not only does not serve the public interest but undermines the public interest goals of diversity, competition and localism.”

More Biz

  • Harvey Weinstein legal team

    Harvey Weinstein Loses Another Defense Lawyer

    Harvey Weinstein has lost another defense lawyer, just three months before he is set to go on trial for rape and sexual assault. Attorney Jose Baez told the judge overseeing the case that Weinstein had taken actions that made it difficult to represent him, according to a letter obtained by the New York Post. Baez [...]

  • https://pmcvariety.files.wordpress.com/2019/06/kindred_spirits_2019_v7.jpg

    Kindred Spirits Host Fundraiser for Child Refugees

    The Kids Entertainment Professionals for Young Refugees will host its third annual Kindred Spirits fundraising campaign this month on behalf of UNICEF and in coordination with World Refugee Day, which is Thursday. The grassroots, volunteer organization’s online fundraiser will take place from June 14-27, and 100% of every donation made will benefit UNICEF. “We call [...]

  • Vid Angel

    VidAngel Hit with $62.4 Million Judgment for Pirating Movies

    A jury on Monday ordered VidAngel to pay $62.4 million to Disney, Fox, and Warner Bros. for streaming hundreds of movies on its service without permission. The verdict is potentially a death blow to the Utah-based company, which sought to allow family audiences to watch Hollywood fare while skipping past violence, sex, and other objectionable [...]

  • Nicholas Sparks

    Nicholas Sparks Apologizes, Explains Opposition to LGBT Club

    Romance writer Nicholas Sparks issued an apology on Monday for remarks he made in 2013 opposing the formation of an LGBT club at his Christian school. In an email published last week by the Daily Beast, Sparks faulted Saul Benjamin, who was then the headmaster of the Epiphany School of Global Studies, for pushing an [...]

  • Game of Thrones Season 8 Production

    'Game of Thrones,' Netflix VFX Among Those to Be Featured in SIGGRAPH Production Talks

    VFX pros behind the final season of “Game of Thrones,” the blockbuster film “Avengers: Endgame,” Pixar’s upcoming “Toy Story 4,” last year’s Oscar-winning “Spider-Man: Into the Spider-Verse,” Netflix series, including “Stranger Things,” and more will give SIGGRAPH 2019 attendees a behind-the-scenes look at their work during the conference’s Production Sessions. There will even be a [...]

  • welcome home Apple Ad

    Cannes Lions Takes Place in Time of Change for Ad World

    The ad industry gathers June 17-21 for its annual celebration of commercials, marketing and creativity, the Cannes Lions in the French Riviera. It does so against a backdrop of ongoing and profound upheaval within the world of advertising. The share prices of all the major ad groups, such as WPP, Publicis and Omnicom, are down [...]

  • R&B Singer Ann Marie Signs With

    R&B Singer Ann Marie Signs With Interscope Records (EXCLUSIVE)

    Chicago-based R&B singer-songwriter Ann Marie, known for her hit “Secret” with YK Osiris, has signed with Interscope Records, the company announced exclusively to Variety today. “Ann Marie is the prototype for today’s artist,” says Nicole Wyskoarko, the label’s EVP of urban operations. “She’s developed and cultivated a dedicated fan base using the tools of today [...]

More From Our Brands

Access exclusive content