Article 2VW6D Sinclair-Tribune Merger Open for Comments

Sinclair-Tribune Merger Open for Comments

by
FHH Law
from CommLawBlog on (#2VW6D)

merger-150x77.pngAs has been widely reported, Sinclair Broadcast Group reached a $3.9 Billion cash and stock agreement in May with Tribune Media Company. The agreement calls for Sinclair to acquire Tribune Media and its 42 broadcast television stations, among other media assets. Just before the July 4 holiday, the companies filed a series of transfer of control applications with the FCC seeking approval for the transaction. As has become customary with other large broadcast transactions, the Media Bureau has now released a Public Notice establishing a docket for the proceeding, announcing the dates by which oppositions and comments on the applications must be filed, and according "permit-but-disclose" ex parte status to the proceeding.

In addition to announcing deadlines, the Public Notice also briefly describes a few of the issues presented by the applications which are certain to be the subject of any number of oppositions and comments. As described in the Public Notice, the proposed transaction would not, absent waivers, rule changes, or divestitures, comply with the local television ownership rules in ten markets in which Sinclair already owns stations. In an eleventh market, Sinclair would, due to the "top 4" prohibition in the local ownership rules, be unable to acquire a duopoly which Tribune currently operates in compliance with the rules. In addition to the local ownership issues in these markets, the applications also request continuation of satellite waivers in two markets and failing stations waivers in two other markets.

In addition to the local ownership issues, the proposed acquisitions also would put Sinclair over the current 39% national ownership cap, even after application of the recently-reinstated UHF discount. Because Tribune's ownership has been focused on larger markets, while Sinclair has focused on smaller to mid-size markets, difficulties with the national ownership cap were perhaps inevitable in this transaction. Indeed, the merger would give Sinclair its first stations in each of the top 5 national television markets (including a VHF in New York).

For both the local television ownership and national ownership cap limits, the transfer of control applications do not request waiver, but instead promise to "take actions" to the extent required to obtain FCC approval. Perhaps anticipating relaxation of the ownership rules in the near future, however, the applicants note that they may file amendments to the applications in the event changes to the local or national ownership rules are proposed or adopted.

Due to the high profile of this transaction, the issues it raises under the local and national television ownership rules, and political controversies surrounding Sinclair, it is almost certain that a large number of comments will be filed regarding the transaction. Petitions to Deny the applications, which require the filer to have specific legal standing to challenge the transaction (e.g., local viewers or competitors in the affected markets), are due to be filed by no later than August 7, 2017. Oppositions from parties who do not satisfy the standard for Petitions to Deny are due by August 22, 2017. Finally, replies to Petitions to Deny and Oppositions are due by August 29, 2017. All pleadings are to be filed in newly established Media Bureau docket number 17-179.

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