Elena J. Despotopulos
On May 8, 2017, Tribune Media Company and Sinclair Broadcast Group announced the planned acquisition of Tribune by Sinclair, a deal that will cost Sinclair $3.9 billion, as well as the assumption of $2.7 billion in debt. See Gary Weitman, Sinclair Broadcast Group To Acquire Tribune Media Company For Approximately $3.9 Billion, Tribune Media (May 8, 2017, 1:00PM). If approved, Sinclair will acquire Tribune’s 42 television stations in 33 markets, bringing Sinclair’s total ownership, operation, or service provision to 233 television stations in 108 markets. Id. Sinclair will own and operate the largest number of stations of any station group. See Sinclair and Tribune, MB Docket 17-179, FCC.gov (last visited July 19, 2018).
While the Sinclair-Tribune deal seemed likely to go through, the Federal Communications Commission (FCC) Chairman Ajit Pai recently issued a statement recommending that the transaction be heard by an administrative law judge. See Ajit Pai, FCC Chairman, Statement on Sinclair/Tribune Transaction (July 16, 2018). Chairman Pai stated that certain proposed divestitures of Sinclair would “allow Sinclair to control those stations in practice, even if not in name, in violation of the law.” Id. Sinclair proposed to divest several stations while simultaneously entering into operating agreements with the new station owners. See Stephen Battaglio, Sinclair Agrees to Sell 23 TV Stations to Gain Approval for Tribune Deal, L.A. Times (Apr. 24, 2018). Under the proposed divestitures, Sinclair will sell off, or divest, some of the stations it will own after the acquisition in order to remain under the current limit of reaching 39% of national households. Id. Opponents of the deal argue that Sinclair’s planned divestures of stations are only evasive methods to work around the FCC’s prohibition against reaching 39% of the national market. See Comments of the American Civil Liberties Union, In the Matter of Applications of Tribune Media Company and Sinclair Broadcast Group, MB Docket No. 17-197 (June 19, 2018) at 7.
The FCC must approve all acquisitions and transfers of a television station license. 47 U.S.C. § 310(d) (2018). One criteria the FCC considers in approving or denying the transfer is whether or not public interest will be served. Id. The consolidation of all these television stations under one company has the potential to reduce diversity in the viewpoints of local news. See Comments of the ACLU, supra. For example, this past spring Sinclair had many of its stations air identical scripted segments warning against fake news, which demonstrates the potential problem control of the market by one broadcasting company poses. See Melanie Schmitz, Local TV forced to denounce ‘one-sided news’ by America’s largest media company, Think Progress (Mar. 30, 2018, 3:16 PM). If a majority of the nation’s local news comes from only one corporation, it is possible that diverse opinions will be stifled and result in only one singular viewpoint being aired. Additionally, the control Sinclair will have of the television broadcasting market would defeat general antitrust policies that seek to protect a competitive market.
Chairman Pai’s statements regarding the divestitures and designation for hearing suggests the deal could potentially fall through. Referral to an administrative law judge frequently results in long delays of mergers and effectively can kill the deal. See David Shepardson & Diane Bartz, FCC raises concerns about Sinclair-Tribune deal; shares skid, Reuters (July 16, 2018, 11:36 AM). In response, Sinclair announced it will develop a new plan to divest stations in order for the acquisition to take place. Ali Breland, Sinclair announces deal changes in attempt to win FCC’s favor on Tribune merger, The Hill (July 18, 2018, 10:49 AM).
The consolidation of the television broadcasting market into a single conglomeration will result in an anticompetitive and non-diverse marketplace, contrary to the FCC’s stated policy. See About the FCC, FCC.gov (last visited July 23, 2018). Thus, the approval or denial of this acquisition should be watched closely, as access to diverse news and opinions will be implicated.