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Sinclair's Bid to Monopolize Local TV News Is Officially Dead

Tribune Media has scrapped its merger deal and has accused Sinclair of "unnecessarily aggressive" behavior.

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Aug 9 2018, 3:32pm

Image: Gage Skidmore/Flickr

Tribune Media has scrapped the company’s $3.9 billion merger with Sinclair Broadcast Group, putting an abrupt end to Sinclair’s controversial bid to dominate local broadcasting.

In a statement, Tribune said it was not only terminating the merger, but would be suing Sinclair for breach of contract. Tribune states it’s seeking compensation for all losses incurred as a result of Sinclair’s “unnecessarily aggressive” behavior during merger approval negotiations with the FCC and DOJ.

Said behavior included what critics say were “sham” divestment deals, where Sinclair attempted to offload some stations to companies it still controlled in a bid to pretend the deal would fall within media ownership limits. Currently, the law states no one broadcaster can reach more than 38% of households (Sinclair would have reached 72% had the deal been approved).

Sinclair’s efforts were so brazen, they forced even the historically mega-industry-friendly FCC chief Ajit Pai to shovel the deal off to an administrative law judge, a move traditionally seen as a death knell for such megadeals.

“In light of the FCC’s unanimous decision, referring the issue of Sinclair’s conduct for a hearing before an administrative law judge, our merger cannot be completed within an acceptable timeframe, if ever,” said Peter Kern, Tribune Media’s Chief Executive Officer. “This uncertainty and delay would be detrimental to our company and our shareholders. Accordingly, we have exercised our right to terminate the Merger Agreement, and, by way of our lawsuit, intend to hold Sinclair accountable.”

Sinclair has only itself to blame.

Sinclair quickly became the stuff of legend after a viral Deadspin video and John Oliver segment highlighted how the company’s programming teeters closer to disinformation than news.

Local Sinclair broadcast stations are routinely mandated to air downright painful “must run” segments. Some of these segments cheered on the government’s decision to lock immigrant children in cages. Others parroted the Trump administration’s relentless attacks on the news media in creepy, seemingly-lobotomized unison.

Sinclair spent much of the last year successfully-convincing the FCC to slowly-but-surely dismantle decades-old media consolidation rules. That involved everything from killing rules requiring broadcasters maintain local offices, to restoring older, unnecessary FCC regulations simply to help Sinclair pretend the merger would fall under the ownership cap.

Unfortunately the effort was so blatant, it culminated in an ongoing FCC corruption investigation into whether agency head Ajit Pai had illegally coordinated the efforts with Sinclair, one of the likely motivators for Pai’s sudden about face last month.

The deal had a wide array of bipartisan critics, from consumer advocates to competitors like NewsMax, who collectively and repeatedly argued the deal would have been terrible for local broadcast competition and the quality of local reporting.

“Today is a good day for every American who believes that diversity of voices in the media is better for our democracy,” said former FCC advisor Gigi Sohn.

“This transaction had but two supporters—Sinclair and Tribune,” Sohn said. “It was opposed by large and small cable companies, rural broadband providers, conservative cable channels and the public interest community. Chairman Pai and his colleagues did right by the American people and the entire broadcast industry by putting the brakes on this merger.”

Granted the immense dysfunction that paved the way for the deal remains intact. And while Sinclair didn’t get to take advantage of Pai’s efforts to severely weaken numerous media consolidation rules, the next terrible media monopoly most certainly will.

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