Sinclair Broadcast Group's plan to create a broadcasting monster hoping it could compete with Fox News by Rupert Murdoch seems to be over.
Sinclair was already the nation's largest local television broadcaster rival TV group Tribune Media for $ 3.5 billion. The agreement would have allowed broadcasters to control seven out of 10 households across the country, including New York, Chicago and Los Angeles.
But in light of the draft Federal Communications Commission's draft this week, whether Sinclair was sufficiently transparent, as it represented the agreement to regulators, and whether a merger would be in the public interest, Tribune said in a statement Thursday that it was "his Evaluated impact and tested all of our options. "
This week has brought with it an impressive shift in momentum for a transaction that once seemed almost certain that it was completed, not least thanks much of policy changes proposed or adopted by the FCC and endorsed by Sinclair. The Commission also had a limit on the number of channels a broadcaster could own and relaxed advertising revenues and other resources shared by broadcasters.
But on Monday, agency chairman Ajit Pai – the subject of an investigation by the FCC General Inspectorate's Office regarding his new policies – said he has "serious concerns" about the Sinclair-Tribune merger. Mr Pai asked the four Commissioners of the Agency to refer their merger review to a magistrate to determine the legality of the Sinclair proposal.
In order to comply with rules prohibiting a single company from having such dominant levels of radio waves, Sinclair had proposed selling 23 TV channels after the deal was completed. But some of these stations would still effectively fall into their operational control, which the F.C.C. "Significant questions as to whether these proposed divestments were actually" fake deals. "
Sinclair, who emerged as a major market for conservative positions, tried on Wednesday to appease the regulators by changing these planned divestitures. The agency was not moved.
Sinclair's initial divestment plan was shortlisted because several of his planned stations would remain under his control through contractual arrangements known as "sidecars."
As an example, the broadcaster was planning to sell the Chicago station to a Maryland businessman, Steven Fader, who runs a company controlled by Sinclair's executive chairman, David D. Smith. The F.C.C. The $ 60 million selling price was "far below market value", citing a Chicago train station that Fox bought in 2002 for $ 425 million.
The sidecar agreement would also identify and allow Sinclair to act as the main salesperson for the station. He gave Sinclair 30 percent of the station's revenue in fees for this service.
Sinclair also agreed to sell a Dallas Station and Houston Station to Cunningham Broadcasting, a privately owned company owned by Mr. Smith's family, according to Securities Filings. The combined selling price for both channels was $ 60 million, "far below the anticipated market price for train stations in markets of this size," according to the FCC's draft.
Sinclair, known for amplifying the Trump administration's discussion points in comments Segments broadcast on numerous local news broadcasts are viewed as a dangerous new competitor among other conservative news channels.
Christopher Ruddy, head of the conservative news network Newsmax, said the Sinclair-Tribune merger would focus too much power in one company. His company vigorously opposed the deal and placed it on the side of liberal-oriented consumer advocacy groups.
"This was a bipartisan effort," he said. Even the president himself was fighting media concentration and this deal was an even greater concentration of power than the AT & T Time Warner deal. "
As a candidate, Donald J. Trump Warner-Gut CNN had repeatedly criticized "Fake News," vowing to stop the AT & T-Time Warner Fusion when it was chosen. The Justice Department recently appealed the verdict that allowed the deal