The Federal Communications Fee on Thursday formally referred Sinclair Broadcast Group’s proposed acquisition of Tribune Media to an administrative choose listening to, and referred to as into query whether or not a few of its divestments within the deal had been a “sham.”
Sinclair has been ready on FCC approval to finish its $three.9 billion buy of Tribune, additional growing Sinclair’s attain throughout the nation.
Citing the sale of three stations Sinclair had deliberate with the intention to fall inside authorities possession caps, the FCC in its listening to order stated, “The report raises important questions as as to whether these proposed divestitures had been the truth is ‘sham’ transactions.”
Two of the stations in query had been set to be bought to Cunningham Broadcasting, an organization run by the property of Sinclair chief government’s mom, at beneath market worth costs, the FCC writes.
“The shut relationship between Sinclair and Cunningham might clarify how Cunningham was in a position to in a position to execute an settlement to buy stations KDAF and KIAH at what look like below-market costs,” the fee wrote within the listening to designation order.
One other potential sale “proposed to switch WGN-TV in Chicago to a person (Steven Fader) with no prior expertise in broadcasting who presently serves as CEO of an organization by which Sinclair’s government chairman has a controlling curiosity,” the fee wrote.
The listening to order additionally says “substantial and materials questions of reality exist” relating to whether or not Sinclair “engaged in misrepresentation and/or lack of candor in its purposes with the Fee.”
Now the transaction will undergo a listening to, which may very well be a prolonged course of and will imply the top of the deal.
Tribune Media stated it’s now assessing its choices.
“Tribune Media has now had the chance to overview the FCC’s troubling Listening to Designation Order. We’re presently evaluating its implications and assessing all of our choices in mild of in the present day’s developments,” the corporate stated in an announcement. “We can be tremendously upset if the transaction can’t be accomplished, however will rededicate our efforts to working our companies and optimizing belongings.”
A Sinclair spokesperson didn’t instantly reply to a request for remark however stated on Wednesday that they’ve at all times been “fully clear” with the FCC relating to the station gross sales, together with “any ongoing relationship we might have with such stations after the gross sales.”
“All related agreements documenting such phrases as required by FCC guidelines have been filed. Whereas we perceive that sure events, which oppose the transaction object to sure of the patrons based mostly on such patrons’ relationships with Sinclair, at no time have we withheld data or misled the FCC in any method in anyway with respect to the relationships or the construction of these relationships proposed as a part of the Tribune acquisition,” Sinclair spokesperson Ronn Torossian stated on Wednesday. “Any suggestion on the contrary is unfounded and with out factual foundation.”
CNNMoney (Washington) First printed July 19, 2018: 5:55 PM ET