Sinclair announces deal changes in attempt to win FCC’s favor on Tribune merger

Sinclair is revising its plan to sell some of its companies in an attempt to appease the Federal Communications Commission (FCC) after the agency outlined issues with the broadcaster’s pending merger with Tribune Media.

The telecommunications company announced Wednesday that it is withdrawing or revising its planned sale of several stations in Houston, Dallas and Chicago, deals that it had planned to make with closely aligned media companies. 

Sinclair said that it now plans to keep the Chicago station, WGN, and is working to still divest from the Houston and Dallas stations, KIAH and KDAF, respectively, via a divestiture trust, operated by an independent trustee.

Sinclair said the proposed changes come in response to FCC Chairman Ajit Pai indicating that the agency is questioning the sales.

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The broadcasting company had planned to make divestitures in an attempt to comply with FCC media ownership rules that prevent a single broadcaster from controlling too many local stations across the U.S.

The FCC had noted that part of its concern over the proposed $3.9 billion merger with Tribune Media was the stations Sinclair planned to sell to.

The company had planned on selling stations in Dallas and Houston to Cunningham Broadcasting Co., a company named after and controlled by the estate of the mother of Sinclair’s executive chairman, David Smith.

Pai said that these sales gave him “serious concerns” about the merger.

“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 earlier this month.

Sinclair said it now plans to push for the stations in Dallas and Houston to be put into a divested trust, but retain the Chicago station.

“Sinclair intends to request permission from the FCC to put the Dallas and Houston stations into a divestiture trust to be operated and sold by an independent trustee following the closing of the Tribune acquisition,” Sinclair spokesman Ronn Torossian said in a statement.

“As a result of the withdrawal of the application relating to WGN, Sinclair will simply acquire that station as part of the Tribune acquisition, which is, and has always been, fully permissible under the national ownership cap,” he continued.

Torossian said Sinclair had been meeting with the FCC in an attempt to ensure compliance with regulations in order to win approval for the merger.

Sinclair’s deal with Tribune has been contentious because of its size. If successful, Sinclair would have a dominating stake in local media across the country.

Democrats have been particularly alarmed by the proposed deal, pointing to must-run segments from the broadcaster that have often have a conservative angle.