×

Appeals Court Removes FCC Roadblock to Sinclair-Tribune Merger

The federal appeals court in Washington, D.C. has removed a temporary regulatory hurdle to Sinclair Broadcast Group’s $3.9 billion acquisition of Tribune Media.

The court of appeals for the D.C. circuit on Thursday removed the temporary stay granted on June 1 on the FCC’s decision to reinstate its so-called UHF discount in connection with its rules regarding limitations on the number of TV stations that a single entity can own.

The UHF discount is crucial to allowing Sinclair to acquire Tribune Media’s 42 stations, a deal that would make Sinclair by far the nation’s largest broadcast group with more than 220 stations covering some 72% of U.S. TV households. The merger agreement was announced May 8 but the federal court’s decision to grant a stay on the UHF discount issue raised questions about whether the deal would pass regulatory muster.

“We are pleased that the Court denied the motion for an emergency stay of a rule that had been in effect for decades,” Sinclair said in a statement. “We remain confident that the Court will conclude on the merits that the UHF discount should remain in place until a thorough review of the current ownership rules is completed.”

The UHF discount is connected to the FCC’s rule that no entity can own stations reaching more than 39% of U.S. TV households. A group’s total reach is calculated by the size of each station’s market. The UHF discount allows owners to count UHF outlets at half of their market’s actual reach to account for the fact that stations on the UHF band (channel positions 14-69) have weaker signals than VHF stations (channel positions 2-13).

The UHF discount is crucial for the largest station groups to maintain ownership of dozens if not hundreds of stations. The Sinclair-Tribune deal would not be permitted, unless a waiver was granted, without the discount.

The FCC last September eliminated the long-standing UHF discount rule on the rationale that the historic advantage that VHF stations had over UHF stations had been leveled out by the fact that so many viewers receive local stations via MVPDs, including the nascent breed of digital MVPDs. Existing station groups were grandfathered in under the old rule but new acquisitions, such as Sinclair-Tribune, would be weighed without the discount.

With a 2-1 vote in April, restoring the UHF discount was among the first initiatives undertaken by new FCC chairman Ajit Pai after his appointment by President Trump. The D.C. circuit court’s decision to stay the FCC’s decision raised the specter of problems for Sinclair-Tribune.

On Thursday, a three-judge appellate panel rejected the request by media watchdog orgs including Free Press for a long-term stay on the FCC’s April decision while the court considers the larger question of the UHF discount and media ownership rules.

The court ruling provided a jolt to shares of Sinclair and Tribune. On a down day for the markets overall, Sinclair shares were up 3% while Tribune was up more than 5%.

More TV

  • Hasan Minhaj

    Nahnatchka Khan, Hasan Minhaj, 'Just Mercy' Cast Talk Inclusion

    “Always Be My Maybe” was “satisfying” to create because it gave focus to two characters that wouldn’t typically be portrayed as romantic leads, said director Nahnatchka Khan of her Netflix film at the CAA Amplify conference in Ojai, sitting on a panel with comedian Hasan Minhaj and NBA star Chris Paul. “We’re all big fans [...]

  • Sebastian Maniscalco

    Sebastian Maniscalco to Host MTV VMAs

    MTV has announced that comedian, actor and best-selling author Sebastian Maniscalco will host the 2019 “VMAs” live from the Prudential Center in Newark, New Jersey on Monday, Aug. 26. Last year, Maniscalco published his best selling book “Stay Hungry,” followed by a stand up tour of the same name. The comedian has also sold out [...]

  • T-Pain, Faheem Rashad Najm. T-Pain performs

    TV News Roundup: 'T-Pain's School of Business' Sets August Premiere

    In today’s roundup, “T-Pain’s School of Business” sets an August 6 premiere on Fuse, and OWN greenlights a new talks series. EXECUTIVE NEWS Matt Brodlie is leaving his role as director of original film at Netflix to join the Disney+ content marketing team as senior vice president of international content development. In his new role, [...]

  • Songs for Screens Powered by Mac

    Songs For Screens: Labrinth on Scoring HBO’s Drake-Produced Drama 'Euphoria'

    British singer-songwriter Labrinth (née Timothy Lee McKenzie) has been having one of the biggest years of his nearly decade-long career, from the April release of his collaborative album with L.S.D. (a.k.a. Labrinth Sia & Diplo) to his starring role in the latest campaign for MINI, where he reinterprets Cole Porter’s cowboy classic “Don’t Fence Me [...]

  • The Office

    'The Office' to Stream Exclusively on NBCUniversal Service Beginning in 2021

    NBCUniversal announced Tuesday that it will begin streaming “The Office” exclusively on its standalone streaming service beginning in 2021. The popular comedy series will leave Netflix once the current deal with NBCU expires at the end of 2020, the same year that NBCU plans to launch its ad-supported streaming service. All nine seasons of the [...]

  • 'Lincoln Lawyer' Series in Development at

    'Lincoln Lawyer' Series in Development at CBS from David E. Kelley

    David E. Kelley is returning once more to the court of legal dramas. CBS has issued a series production commitment for “The Lincoln Lawyer,” with Kelley in position to pen and executive produce. Based on the series of bestselling novels by Michael Connelly, the show hails from A+E Studios in association with CBS TV Studios. [...]

  • Patrick Somerville'Maniac' TV Show premiere, London,

    'Maniac' Creator to Helm 'Made for Love,' 'Station Eleven' for WarnerMedia

    “Maniac” creator Patrick Somerville has signed on to helm two new series, “Made for Love” and “Station Eleven,” for WarnerMedia’s upcoming streaming service. “Made for Love,” which will be executive produced and directed by S.J. Clarkson, is a 10-episode, straight-to-series adaptation based on the novel of the same name by Alissa Nutting. The half-hour comedy [...]

More From Our Brands

Access exclusive content