Ajit Pai Finds a Spine, Sends Sinclair-Tribune Deal to Merger Purgatory
FCC boss’ sudden interest in factual data could doom the controversial deal.
Pai speaks during a Senate Appropriations Subcommittee hearing in Washington, DC, May 2018. Photo: Zach Gibson/Bloomberg via Getty Images
In a bizarre about face, Ajit Pai, chair of the US Federal Communications Commission, this week suddenly raised doubts about Sinclair Broadcast Group’s justifications for the company’s controversial $3.9 billion merger with Tribune Media, sending the deal to a potentially merger-killing review by an administrative law judge.
Sinclair’s merger has been widely criticized as terrible for the health of local news, since it would give the broadcasting giant ownership of more than 230 local stations across 72 percent of the United States. Given that Sinclairs news has been widely derided as creepy disinformation on a good day, critics worry the deal could be fatal for already shaky American discourse.
We’ve discussed at length how Pai has gone out of his way to eliminate numerous media consolidation rules specifically to grease the skids for Sinclair’s deal. Pai’s favoritism was so blatant, it resulted in a corruption investigation by the nonpartisan FCC Inspector General into whether Sinclair and Pai had coordinated their assault on the rules.
But today, Pai suddenly announced that he wasn’t sold on Sinclair’s justifications for the merger, and would be approving an order that mandates a review by an administrative law judge.
“Based on a thorough review of the record, I have serious concerns about the Sinclair/Tribune transaction,” the FCC boss said in a statement. “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.”
Current law prohibits any one company from reaching more than 39 percent of all U.S. TV households in a bid to protect competition and local reporting. Sinclair had petitioned the FCC to eliminate the ownership cap entirely, but the FCC lacks the authority to overturn federal law (that apparently wasn’t stopping the FCC from considering the move anyway).
In case that failed, Sinclair had a backup plan. Consumer advocates highlighted how Sinclair had hoped to offload numerous stations to either shell companies, subsidiaries, or allies, letting it limbo under the ownership cap.
But with Pai currently under investigation for corruption by his own agency, signing off on that sort of gamesmanship likely would have proven problematic. And a nonpartisan judicial review is far less likely to turn a blind eye to Sinclair gamesmanship.
“When the FCC confronts disputed issues like these, the Communications Act does not allow it to approve a transaction,” Pai proclaimed. “Instead, the law requires the FCC to designate the transaction for a hearing in order to get to the bottom of those disputed issues.”
Pai’s fellow Commissioner Jessica Rosenworcel was quick to applaud Pai’s about face, regardless of the motivation.
“For too long I have been the only one at the FCC complaining about the favoritism this agency has shown Sinclair,” Rosenworcel said on Twitter. “I am glad that my colleague Ajit Pai now shares my concerns. He deserves credit for the hearing designation order seeking to halt the merger with Tribune.”
Pai’s action means that Sinclair’s attempt to get its merger approved, at least in its current form, now faces a very steep uphill climb.
As the FCC’s net neutrality repeal painfully illustrated, Pai traditionally hasn’t cared much for hard, factual data. Just a few months ago, it seemed more than likely that Pai’s FCC majority was preparing to rubber stamp Sinclair’s deal, especially after spending much of the last year fiddling with agency rules to specifically aid the deal.
But Pai’s hearing designation order makes it significantly harder for Sinclair to bullshit their way to deal approval, potentially relegating the controversial merger to the scrapyard of terrible ideas.