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Exclusive: Sinclair approaches Tribune Media about possible deal - sources

RadioPatrol said:
Update the FCC is challenging the Sinclair/Tribune deal.
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Interesting...he's following the law as it was written. Of course, he would like to change the ownership limits, but as they stand now, the merger shouldn't be approved.

As I said earlier in this thread, if Entercom had used the same approach of divesting stations to relatives or friends, it would have met with the same resistance.
 
TheBigA said:
Interesting...he's following the law as it was written. Of course, he would like to change the ownership limits, but as they stand now, the merger shouldn't be approved.

As I said earlier in this thread, if Entercom had used the same approach of divesting stations to relatives or friends, it would have met with the same resistance.
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Raycom and Gray might find themselves in a Similar issue with the FCC though given that they have a proposed deal similar to Sinclair/Tribune and in certain parts of the country Raycom is a direct competitor to Sinclair.
 
RadioPatrol said:
Raycom and Gray might find themselves in a Similar issue with the FCC though given that they have a proposed deal similar to Sinclair/Tribune and in certain parts of the country Raycom is a direct competitor to Sinclair.
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Two things that made the Sinclair deal shady: The use of the UHF discount, which was a complete sham. And the divesting of stations to shell companies also controlled by Sinclair. I don't know if Gray has tried either of those, but if so, they should meet the same resistance.
 
TheBigA said:
Two things that made the Sinclair deal shady: The use of the UHF discount, which was a complete sham. And the divesting of stations to shell companies also controlled by Sinclair. I don't know if Gray has tried either of those, but if so, they should meet the same resistance.
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I Know Raycom Is connected to American Spirit Media to go around the ownership rules and that can derail the Gray deal.
 
https://www.reuters.com/article/us-...n-tribune-may-involve-deception-idUSKBN1K62B8

Another Update on the FCC's reaction of the Sinclair/Tribune deal

WASHINGTON (Reuters) - A draft Federal Communications Commission order seen by Reuters on Monday said that Sinclair Broadcast Group Inc’s (SBGI.O) application for approval to purchase Tribune Media Co (TRCO.N) may “involve deception.”

The order said that “Sinclair’s actions here potentially involve deception” and noted possible “misconduct.”


FCC Chairman Ajit Pai said on Monday he has “serious concerns” about Sinclair’s proposed $3.9 billion acquisition of Tribune, an announcement that could scuttle the deal.
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https://www.politico.com/amp/story/...rump-tribune-689026?__twitter_impression=true

Here is the fallout on the Sinclair/Tribune FCC response

Sinclair Broadcast Group had everything going for it when it announced its $3.9 billion purchase of Tribune Media in May 2017: close ties to the Trump administration, and a friendly Federal Communications Commission chairman who cleared a path for regulators to approve the megadeal.

Sinclair, known for its “must-run” pro-Trump programming, was already the country’s biggest television broadcaster. The deal would make it even bigger, allowing it to reach nearly three-quarters of U.S. households — further positioning it to take on Fox in the battle for conservative eyeballs.

But 14 months later, Sinclair's deal is headed toward an almost-certain defeat, with that same FCC chairman, Ajit Pai, sending the merger on Monday into an administrative proceeding that is tantamount to a death sentence.

The story of how Sinclair's deal ran into trouble, despite its considerable sway in Republican-led Washington, is a tale of stunning hubris, according to officials inside and outside the FCC who watched the drama unfold. The broadcaster needed to sell stations to stay under federal media ownership limits, but instead it aggressively pushed proposals that would have left it in effective control of some of those spun-off outlets — raising alarms at an FCC that had already relaxed some ownership rules to the company's benefit.

Pai made clear Monday that the company had pushed the envelope too far, saying the proposed divestitures would "allow Sinclair to control those stations in practice, even if not in name, in violation of the law."

People watching the Tribune purchase called it a striking turnabout.

“Sinclair’s style in Washington is Exhibit A of how to squander the most favorable regulatory environment in decades,” said one broadcast industry official who has monitored the deal's progress.

Pai's trajectory on the Sinclair deal speaks volumes.

Shortly after assuming the FCC's top job, the chairman last year revived a decades-old regulatory loophole — widely viewed as technologically obsolete — that lets broadcasters count only half the reach of some of their TV stations when calculating their compliance with national media ownership rules. The change allowed Sinclair to avoid vastly exceeding the cap, sparking criticism that Pai had delivered a gift to the conservative-leaning broadcaster.

Even with the loophole, though, the Sinclair-Tribune merger still would leave the company with stations reaching more households than the federal limits allow. That meant Sinclair needed to restructure its deal — but it waited months to put forward a plan for doing that. And when it did agree to make concessions, proposing to sell off nearly two dozen stations in some markets, some of the deals left stations in the hands of Sinclair allies or let Sinclair retain a stake in their operations.

In the end, even Pai — a chairman with a pro-industry, anti-regulation reputation — was troubled by Sinclair's deal-making.

“Let’s be honest, if you’re Sinclair and you lose Chairman Pai, you’ve done something wrong,” said a person in the media industry who is opposed to the transaction.

Within hours of Pai's announcement Monday, FCC Commissioners Brendan Carr, a fellow Republican, and Jessica Rosenworcel, a Democrat, indicated they would support the chairman's plan to send the matter to an administrative law judge, a lengthy process that in past transactions has proven to be a deal killer. That represents a majority on the commission needed to advance the measure.

Sinclair, in a statement late Monday, said it was "shocked and disappointed" by the chairman's announcement and said it's "prepared to resolve any perceived issues" in order the finalize the acquisition.

"At no time have we misled the FCC in any manner whatsoever with respect to the relationships or the structure of those relationships proposed as part of the Tribune acquisition," Sinclair said. "Any suggestion to the contrary is unfounded and without factual basis."

Another misstep by Sinclair: It allowed the government's review process to drag on, giving the broadcaster's many critics time to savage the transaction. The result was more time for controversies such as a viral video in April that showed a series of Sinclair anchors reading from the same script on the threat of “fake news" — widely seen as a Trump-style broadside aimed at mainstream press outlets.


The company also didn’t bother building support for its deal with outside organizations, like nonprofits and trade groups, that are typically deployed to make the case for mergers. Sinclair’s in-house lobbyist, Rebecca Hanson, left the company earlier this month.

And in December, when the FCC announced a $13 million fine against Sinclair over an unrelated issue — an allegation that the company violated sponsorship identification rules — Sinclair took the aggressive step of saying it would fight the penalty rather than attempt to settle.
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This probably wasn't helpful:

"Before the FCC vote, Newsmax CEO Christopher Ruddy confirmed that he expressed his opposition to the deal to President Donald Trump."
 
Something you need to understand, sending this to a judicial hearing effectively kills the deal. The Sinclair/Tribune deal is effectively dead. I suppose they could rework it somehow and resubmit the whole thing, but it would look a lot different that this deal. The use of supposedly independent third parties is what killed this thing. I'm only surprised that this FCC finally decided deals like that are an end run around the rules. Lots of ownership groups have used them and the FCC hasn't batted an eye, until now.
Here's a good article on the subject: https://www.engadget.com/2018/07/19/fcc-sinclair-tribune-buyout-vote-hearing-designation-order/
 
Is the sale of the seven stations Tribune is selling to Fox still on? Or will it still be if (or when) the merger goes ashcan?
 
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