Sinclair stands by Tribune merger despite FCC setback

Sinclair Broadcast Group is sticking by its proposed $3.9 billion merger with Tribune Media despite a major setback for the deal at the Federal Communications Commission (FCC).

On Monday, FCC Chairman Ajit Pai, who has been a reliable ally for Sinclair since taking over the agency, announced that he had “serious concerns” with the deal’s legality and proposed sending it before an administrative law judge — a process that’s usually a deal-killer for such mergers.

But Sinclair came out with a defiant statement Monday night saying that it remains committed to the deal.

{mosads}

“We are prepared to resolve any perceived issues and look forward to finalizing our acquisition of Tribune Media,” Ronn Torossian, a company spokesman, said in a statement.

“The proposed merger of Sinclair Broadcast Group and Tribune Media will create numerous public interest benefits and help move the broadcast industry forward at a time when it is facing unprecedented challenges. We look forward to working with regulators to make the merger a reality.”

Companies like Sinclair are restricted from serving more than 39 percent of the nation’s television-viewing audience. The merger with Tribune would put the combined company well over that legal limit, so Sinclair proposed selling off 23 local television stations around the country.

A handful of those deals were sidecar arrangements, where Sinclair would ostensibly sell the station but retain some control over its programming and advertising.

Pai cited those arrangements as the reason for his concerns.

“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,” he said in his statement Monday.

Torossian said that Sinclair was “shocked and disappointed” by the chairman’s decision and insisted that the company never tried to mislead the FCC about the nature of the transactions.

“These structures are consistent with structures that Sinclair and many other broadcasters have utilized for many years with the full approval of the FCC,” Torossian said. “During these discussions and in our filings with the FCC, we have been completely transparent about every aspect of the proposed transaction.”