The FCC’s Media Bureau has asked Sinclair to back up a bunch of its pledges to bring its proposed $3.9 billion purchase of Tribune stations within the FCC's current media ownership rules, including the duopoly and national ownership cap, as well as of the benefits of the deal.
The FCC also wants more supporting material to back up claims about benefits to the ATSC 3.0 transmission standard transition and assertions the deal would offer greater value to MVPDs.
Sinclair generally pledged to spin-off or seek waivers for stations that brought it above those rules, but on the hope that the deregulatory FCC will have loosened some of those rules, also included language about the FCC potentially changing those rules.
FCC chair Ajit Pai has signaled he thinks the ownership regs need loosening, but Media Bureau chief Michelle Carey, in a letter to Sinclair dated Sept. 14, signaled that Sinclair needs to get a lot more specific about what exactly it will do to comply with the current rules.
The letter included these observations: "The applicants do not indicate what steps, if any, they have already taken or plan to take post-transaction to comply with the national ownership limit," and "the applicants do not indicate what steps, if any, that they have taken so far to comply with the local television ownership rules," including what steps they might have taken to market some stations for sale to come into compliance.
The bureau also wants Sinclair to provide detailed descriptions and documents supporting the capital investments it says it plans to make to expand local and news coverage at former Tribune stations, broken out by sports, local government coverage, investigative reporting and more.
"This is just the latest obstacle for the Sinclair merger, potentially pushing a final decision on the merger well into next year," suggested Allied Progress executive director Karl Fricsh, whose group is fighting to block the deal.
Further requests for information are not unusual in merger reviews. But the request appears to dovetail with calls by deal critics for much more specificity, and appears to signal that Sinclair should be structuring the deal under the current rules. Sinclair has said it will definitely comply with all the rules.
The Coalition to Save Local Media, which is a coalition of deal critics and opponents, was buoyed by the FCC's drill-down.
“The FCC is taking steps to give the Sinclair-Tribune merger the scrutiny it requires by asking the Applicants questions raised by interested parties as well as Members of Congress that have gone unanswered for far too long," the group said. "Now Sinclair-Tribune must justify how this merger is in the public interest and how the combined company plans to comply with ownership rules."
Another way to look at the FCC's request is that it is giving Sinclair a chance to strengthen its case against those critics.
“While our coalition eagerly awaits Sinclair-Tribune’s response, sharp scrutiny must be given to any and all evidence they provide," the coalition said.