Sinclair-WGN deal in trouble; FCC chairman Ajit Pai calls for hearings

FCC Chairman Ajit Pai said Monday he has “serious concerns” about Sinclair-Tribune Media’s $3.9 billion deal and wants to have hearings, a move that could delay the deal for months.

A proposal for some stations — including “Chicago’s Very Own” WGN-TV, Channel 9 — to be sold off but continue to be operated by Sinclair is a “violation of the law,” Pai said. WGN-TV has been broadcasting news and original programming in Chicago since April 5, 1948.

Sinclair had proposed keeping WPIX-TV, New York.

“It’s widely recognized that when something is set for a hearing that the deal is not going to survive,” Gigi Sohn, a top aide to former FCC Chairman Tom Wheeler, told Reuters

Tribune Media declined to comment Monday. Sinclair didn’t return a message.

WGN-TV and WGN-AM are among Tribune Media’s 42 local TV stations that Sinclair announced it would acquire in a $3.9 billion deal. The deal was announced in May 2017 but still needs approval from the Department of Justice and Federal Communications Commission.

Shares of Tribune Media and Sinclair Broadcast Group both slumped. Tribune Media plunged 15 percent to $32.80, and Sinclair sank 5.2 percent to $31.23.

Sinclair is already the largest operator of local TV stations in the U.S.

Here is Pai’s full statement:

“Based on a thorough review of the record, I have serious concerns about the Sinclair/Tribune transaction. 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. When the FCC confronts disputed issues like these, the Communications Act does not allow it to approve a transaction. Instead, the law requires the FCC to designate the transaction for a hearing in order to get to the bottom of those disputed issues. For these reasons, I have shared with my colleagues a draft order that would designate issues involving certain proposed divestitures for a hearing in front of an administrative law judge.”

Contributing: The Associated Press