×
You will be redirected back to your article in seconds

Sinclair and Tribune Face Midnight Deadline on Merger Decision

WASHINGTON — Sinclair Broadcast Group and Tribune Media face a midnight deadline on whether to continue to pursue their $3.9 billion merger deal despite the FCC’s refusal to approve the transaction.

The sides have the ability to walk away after today, per the terms of the initial agreement inked in May 2017. Sinclair would not comment on the status of the deal during its second quarter earnings call with Wall Street analysts on Wednesday morning.

The growing consensus in the marketplace is that Sinclair will give up on the effort to buy all of Tribune’s 42 stations and WGN America cable channel. That raises the possibility that Tribune would move to sell off its stations in piecemeal fashion, which could still leave openings for Sinclair.

“In regards to the acquisition of Tribune Media Company, we are working with them to analyze approaches to the regulatory process that are in the best interest of our companies, employees and shareholders,” Sinclair CEO Chris Ripley said in a statement.

The FCC last month set up a big hurdle for the deal in voting to send aspects of the transaction to a judge for an administrative hearing. That step came after FCC chairman Ajit Pai raised questions about the veracity of some of the information provided to the commission by Sinclair.

The $3.9 billion transaction would combine two of the country’s largest broadcasters into a giant with more than 200 stations. Public interest groups have lined up against the merger, and Democrats contend that Sinclair was trying to infuse local stations with a conservative bent.

The new administrative process could add a year or more to the regulatory review. The process before administrative judge Richard Sipple also will be public, and could pose a risk for the company in other ways.

Last month, Pai announced that he had “serious concerns” about the transaction. The commissioners voted unanimously to send the merger to an administrative law judge for a hearing. That hearing process has typically killed previous transactions. An adverse ruling also could raise the question of whether Sinclair’s existing broadcast licenses could be challenged.

The FCC claimed that Sinclair engaged in “a potential element of misrepresentation or lack of candor” in its effort to secure government approval. That centered on the way that Sinclair laid out its plans to divest certain stations, a necessity if it was to comply with media ownership limits.

Among other things, the FCC zeroed in on the business ties between Smith and businessman Steven Fader in connection with the plan to sell Tribune’s WGN-TV Chicago to a new entity controlled by Fader for $60 million. That plan sparked concern from merger opponents because the purchase price was so far below fair market value for a Chicago TV station. Fader is CEO of Atlantic Automotive Group, in which Smith has an equity interest and also sits on its board. The commission’s order noted that Fader had no prior broadcast TV experience, and the transaction was structured as to give Sinclair sway over the station’s operations.

Sinclair denied that it misrepresented the facts in its merger filings.

Sinclair’s ties to President Trump had been an issue throughout the regulatory process, and Trump publicly expressed his unhappiness at the FCC for failing to approve it. He called it “sad and unfair,” and added, “This would have been a great and much needed Conservative voice for and of the People. Liberal Fake News NBC and Comcast gets approved, much bigger, but not Sinclair. Disgraceful!”

One of Trump’s former communications spokespersons, Boris Epshteyn, is chief political analyst at Sinclair.

Pai, who Trump appointed as FCC chair, told a congressional hearing that he stood by the decision, and last week he said that he has not had any contact with the White House following the president’s tweet.

The merger was first inked in May 2017, and the transaction immediately became a focus of a lobbying battle in D.C. As Sinclair defended the transaction as necessary consolidation in the face of competition from cable and tech, opponents waged social media campaigns. Some other conservative news outlets, like Newsmax, The Blaze and One America News Network, publicly opposed the transaction.

One voice that did not weigh in publicly was 21st Century Fox. An initial rival to Sinclair for the Tribune stations, Fox later reached an $910 million agreement to acquire seven Tribune-owned Fox affiliates as part of Sinclair’s divestiture plan. There’s speculation that Fox could pursue a deal with Tribune for those stations on its own, or perhaps seek a private equity partner to help it make a run at buying all of Tribune.

Cynthia Littleton contributed to this report.

More Politics

  • BEVERLY HILLS, CALIFORNIA - JUNE 22:

    Quality Control's Coach K Says Abortion Ban Has Already Impacted Business in Atlanta

    A who’s who of black entertainment and tech filled the Beverly Hilton Hotel ballroom on June 22 for the 4th annual Culture Creators Innovators and Leaders Awards brunch. Honorees included Byron Allen, who received the Icon Award; actress and executive producer Marsai Martin, who was named Innovator of the Year; and Quality Control Music founders [...]

  • Wyclef Jeans Warns Democrats: 'Trump Can

    Wyclef Jean Warns Democrats: 'Trump Can be Re-Elected'

    Wyclef Jean, the actor and rapper who performed the 2016 song “If I Was President,” is no stranger to politics, after trying to run for president of his native Haiti in 2010. At Cannes Lions, the annual advertising conference in the South of France, Jean talked about the future of music but his conversation with [...]

  • Hope Hicks

    Hope Hicks Refused to Answer Committee's Questions 155 Times

    Fox communications chief Hope Hicks refused to answer questions from the House Judiciary Committee on 155 separate occasions during closed-door testimony, the committee chairman said Thursday. The committee released a transcript of the hearing on Thursday afternoon. Prior to the hearing, President Trump directed Hicks not to answer questions about her service as a senior [...]

  • Hope Hicks

    Hope Hicks Gives Closed-Door Interview on Mueller Probe

    Hope Hicks appeared at the House Judiciary Committee on Wednesday morning to give closed-door testimony on her involvement in the special counsel investigation of President Trump. The Fox communications chief was subpoenaed in May to provide documents and testimony that would aid in the committee’s investigation into obstruction of justice. After extensive negotiation, Hicks agreed [...]

  • Prince Mohammed bin Salman Abdulaziz al

    Saudi Crown Prince Should Be Investigated Over Khashoggi Killing, U.N. Report Says

    Mohammed bin Salman, the crown prince of Saudi Arabia, should be investigated in connection with the killing of Jamal Khashoggi because of “credible evidence” that the prince is among those liable for the dissident journalist’s death, a United Nations report said Wednesday. While no “smoking gun” has yet been found that directly incriminates the prince [...]

  • Sarah Huckabee Sanders Jemele Hill

    Sarah Huckabee Sanders to Leave the White House

    White House press secretary Sarah Huckabee Sanders is leaving her position at the end of the month, President Donald Trump said Thursday. In two tweets, Trump announced Sanders’ departure for her home state of Arkansas before thanking her for “a job well done.” He also recommended her for the Arkansas governor position, writing, “She is [...]

  • Kellyanne Conway

    Federal Watchdog Says Kellyanne Conway Should Step Down

    A federal watchdog has recommended that White House counselor Kellyanne Conway should be fired for repeated violations of the Hatch Act. In a report on Thursday, the U.S. Office of Special Counsel found that Conway had used TV appearances and social media platforms to disparage Democratic presidential candidates while speaking in her official capacity. “Ms. [...]

More From Our Brands

Access exclusive content