FCC opens investigation into Sinclair’s disclosures in failed Tribune deal

by David Shepardson

WASHINGTON (Reuters): The Federal Communications Commission has launched a new investigation into whether Sinclair Broadcast Group Inc made false statements or showed a lack of sincerity in its failed attempts to win approval to buy Tribune Media Co for $3.9 billion.

In a June 25 letter to Sinclair, published Wednesday on the FCC’s website, the government agency ordered Sinclair to answer a series of questions and provide documents by July 9, warning that “failure to respond accurately and completely to this (letter) is a violation of the Act and our rules.”

Sinclair did not immediately respond to a Reuters request for comment.

In March, an administrative judge dismissed a hearing over allegations that Sinclair, the largest owner of a U.S. broadcast network, may have misled regulators. Judge Jane Halprin, however, added that the allegations “are extremely serious allegations that reasonably require thorough investigation.”

In August, Tribune completed the sale of 42 television stations in 33 markets to Sinclair, which owns 192 stations. A month earlier, the FCC had put the deal up for hearing, questioning Sinclair’s sincerity about the planned sale of some stations and suggesting that Sinclair would actually retain control of them.

The collapse of the deal, which was supported by U.S. President Donald Trump, potentially dashed Sinclair’s hopes of building a conservative-leaning national television powerhouse that could compete with Twenty-First Century Fox Inc.’s Fox News.

In March, Sinclair said it continued to “maintain that we have been completely candid, transparent and honest with the FCC in its review of our proposed acquisition of Tribune Media.”

Andrew Schwartzman, a law professor at Georgetown University, said the FCC could have waited to address the issue when Sinclair’s licenses were up for renewal, but said an investigation was “inevitable” given the FCC’s previous findings.

After the deal collapsed, the FCC’s Bureau of Enforcement said it had no objection to dismissing the hearing.

In December, Nexstar Media Group Inc. said it would buy Tribune for $4.1 billion, making it the largest regional television station operator in the United States. The deal is still under review by the Department of Justice and the FCC.

Democrats accused Sinclair of skewing news coverage to favor Republicans. Last year, Trump criticized the Republican-led FCC for not approving the Tribune agreement, stating on Twitter that it “would be a great and much-needed conservative vote on behalf of and among the nation.”

In 2017, the FCC said it fined Sinclair $13.38 million after failing to properly disclose that paid programming on local television stations was sponsored by the cancer institute.

Sinclair could face new penalties in the latest investigation.

In May, Walt Disney Co said it would sell its stake in 21 regional sports networks and Fox College Sports to Sinclair for $9.6 billion.

(Reporting by David Shepardson; Editing by Stephen Coates)