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Trump’s new rules will let Sinclair gobble up Tribune

It’s a major deal made possible in part by recent changes to law at the FCC.

FCC Chairman Ajit Pai Speaks At American Enterprise Institute Chip Somodevilla / Getty

Sinclair Broadcast Group announced Monday it will acquire Tribune Media Company for $3.9 billion, the latest sign that media and telecom giants plan to take advantage of a relaxed regulatory environment under U.S. President Donald Trump.

If the deal is consummated, it would combine two of the country’s largest owners of local TV stations: Sinclair could add 42 stations in 33 markets to its media empire, as well as the cable network WGN America and other assets.

For the moment, the fate of the deal rests in the hands of the Federal Communications Commission as well as the nation’s antitrust regulators. As with any merger of this size, the government has the ability to review and block the merger, permit it to proceed as proposed, or require Sinclair and Tribune to make certain changes in order for them to proceed.

Already, though, Sinclair has benefited greatly from the FCC: Under its Republican chairman, Ajit Pai, the agency has relaxed media ownership rules, beginning with a change in the way some stations are counted toward a company’s national footprint. That deregulatory move made Sinclair’s bid for Tribune fathomable, analysts have said.

Once merged, Sinclair could still exceed the FCC’s limit that broadcasters cannot have a market share greater than 39 percent. By some measures, it could reach 50 percent. In that case, it could divest some TV stations it’s purchased in order to stay below the cap — but Pai has also explored raising the limit, which could grant the company another big break.

Instead, Sinclair’s biggest challenge might be politics — and reports about its ties to Trump.

During the 2016 election, Sinclair stations appeared to have great access to the presidential candidate. While the company claimed it was not playing favorites, Trump’s closest aide, Jared Kushner, said in December that Sinclair had actually struck a deal with Trump’s campaign with respect to its coverage. (Sinclair said the deal never happened.)

Months later, Sinclair snapped up Boris Epsteyn, one of Trump’s spokespeople in the White House, as a chief political analyst.

Still, the criticism about the company’s close ties to conservatives predate the current presidency: Days before the 2004 election, it aired a documentary criticizing Democratic contender John Kerry’s military record.

For now, the FCC’s changes under new Republican leadership have drawn considerable criticism from Democrats, which feared it would only further consolidation in the media and telecom industries.

“The Commission just wrapped up and put a bow on a huge gift for those large broadcasters with ambitious dreams of more consolidation,” said Mignon Clyburn, the FCC’s sole Democratic commissioner, during an agency meeting last month. “Now, I am not a betting woman, but mark my word: This Order will have an immediate impact on the purchase and sale of television stations.”

Pai, however, has stressed he plans to evaluate every transaction on its merits. Asked about his work to relax ownership rules, he told Recode last week: “Transactions are always going to come and go, depending on what the regulatory framework is.

“We’re simply convinced that we have to have a set of rules that reflect the marketplace of 2017,” he said, “not the marketplace of yesteryear.”


This article originally appeared on Recode.net.

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