FCC Blocks Sinclair-Tribune Deal

Jul 16, 2018
Originally published on July 16, 2018 7:43 pm
Copyright 2018 NPR. To see more, visit http://www.npr.org/.

ARI SHAPIRO, HOST:

The head of the Federal Communications Commission delivered what may prove to be a deadly blow to the expansion plans of Sinclair Broadcast Group. Sinclair is already the largest owner of local TV stations in the U.S., and it is hoping to get even bigger. It wants to acquire 42 stations from Tribune Media. That would give it a foothold in the nation's two largest markets, New York and LA. Today's news represents a real reversal of fortunes for the company. NPR media correspondent David Folkenflik joins us now to talk about it. Hi, David.

DAVID FOLKENFLIK, BYLINE: Hey, Ari.

SHAPIRO: What exactly did FCC Chairman Ajit Pai do today?

FOLKENFLIK: Well, as part of the deal, Sinclair has promised to spin off or sell some of the stations it acquires and some of the stations it already holds. Ajit Pai said in a statement that he's no longer confident of some of the assurances that Sinclair gave. And particularly what he's talking about is the independence of the stations once they are sold off. That is, at least two of the companies that are proposed to acquire stations from Sinclair really have close ties to Sinclair.

And, you know, one involves a company essentially founded by the mother of the brothers who control the company still. Another involves Armstrong Williams, who had a lot of ties in the past with Sinclair and seems to have a company that exists only to buy their stations more or less. And so the real question about the independence of those companies - of those stations once they were to be spun off - he's referred it to an administrative law judge to review.

SHAPIRO: Remind us what Sinclair company is all about and what it hoped to achieve with this acquisition.

FOLKENFLIK: So they own or control more than 190 stations already across the country, and they want to do a couple of things. They wanted to acquire stations in major markets and really consolidate their control on the local TV business. It's worth noting they're based outside Baltimore. They have quietly built up since the early 1970s this cadre of stations to be a major media company and also a major conservative media company, spreading a message that's very pro-Trump in this day and age and recently caught up in controversy over spreading a message echoing the president's rhetoric that much of the rest of the media is fake news. And so this was seemingly going to be on a glide path to further consolidation.

SHAPIRO: The Trump administration and Chairman Pai have not been hostile to Sinclair in the past, so why this reversal?

FOLKENFLIK: Well, I think that's a very fair question. Certainly Pai himself is under investigation from the inspector general of his own agency, the FCC, after questions were raised by Democratic lawmakers on the Hill. Pai in - had been a Republican-appointed member of the - excuse me - a Republican member of the FCC and was elevated by President Trump to lead the agency. And he essentially swept aside rules that would have prevented Sinclair from growing, from acquiring more stations last year. It seemed as though - there were questions raised about the nature of his correspondence with Sinclair to the point of the extent to which they were involved in drafting the revisions of the regulations by which they seemed to benefit.

And so for Pai to do this is a reversal, but certainly he's doing it at a time of intense and increased scrutiny. It's worth also noting of course that the AT&T and Time Warner merger which had won approval from a judge is under increased pressure and is going to be appealed by the U.S. Justice Department. And so that increased consolidation in local news may have seemed one bridge too far for Pai as well.

SHAPIRO: Is this the last word? Does this mean the acquisition definitely won't happen?

FOLKENFLIK: Well, it went from fast glide path to a slow boat to administrative court. In the past, when the AT&T-T-Mobile merger had been proposed and a predecessor of Pai had put it on this path, it essentially killed the deal. It depends on how long Sinclair is willing to put up with it. There's been no comment yet, but Pai's won the approval of commissioners to send it to this judge.

SHAPIRO: That's NPR's David Folkenflik. Thanks, David.

FOLKENFLIK: You bet. Transcript provided by NPR, Copyright NPR.