Ajit Pai, the chairman of the Federal Communications Commission (FCC) said on July 16 that the proposed merger between Sinclair Broadcast Group and Tribune Media could be “in violation of the law.”
His surprise statement could kill off a deal worth a reported $3.9 billion. In a statement, he said he had “serious concerns” about Sinclar’s acquisition of Tribune.
“The evidence we’ve received suggests that certain station divestitures that have been proposed to the FCC would allow Sinclair to control those stations in practice, even if not in name, in violation of the law,” Pai wrote. “When the FCC confronts disputed issues like these, the Communications Act does not allow it to approve a transaction.”
Current law requires the FCC body to designate the transaction to a hearing to discuss all potential issues. Pai said he has already called for a hearing before an administrative judge in a “draft order.”
Sinclair is one of the largest television broadcasting companies in the country, according to their website. The company owns and operates, programs or provides sales services to 192 television stations, 611 channels, and 89 U.S. markets. They did not immediately respond to a request for comment.
Pai’s draft order, not yet provided to the public, but seen by Reuters, allegedly includes a statement that Sinclair’s actions in its acquisition application “potentially involve deception.” Critics of the deal said it would give too much influence to one company and would kill off competition from smaller media companies. Sinclair has said that if the deal was approved they would be able to reach nearly “59 percent” of the nation’s television households.
Tribune has also consolidated a huge market. According to the website they own or operate 42 local television stations.
“It’s well past time for Sinclair to realize that its effort to engage in massive media consolidation has failed and that it should withdraw the transaction without delay so the FCC no longer needs to devote any of its limited resources to a doomed endeavor,” Matthew Polka, CEO of the American Cable Association, said in a statement Monday.
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