FCC chair voices ‘serious concerns’ about Sinclair-Tribune deal, stocks tumble
Shares of Tribune Media and Sinclair Broadcasting tumbled after Federal Communications Chairman Ajit Pai said he’s not sold on the deal.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| TRCO | n.a. | n.a. | n.a. | n.a. |
| SBGI | SINCLAIR | 12.74 | +0.32 | +2.58% |
“Based on a thorough review of the record, I have serious concerns about the Sinclair/Tribune transaction” he said in a statement. According to Pai, the proposed station divestitures would leave Sinclair in control of them "in practice, even if not in name” he notes.
Pai has submitted a draft hearing order that would send the divestiture issues he is concerned about to an administrative law judge for review.
Shares of Tribune were halted as the FCC released its documentation and have since resumed trading. When reached for comment the U.S. Department of Justice, via a spokesperson, told FOX Business its review of the deal is underway. “The Antitrust Division is aware that the FCC Chairman has prepared a draft order that would designate issues involving certain proposed divestitures for a hearing in front of an administrative law judge. The Antitrust Division’s separate review of the Sinclair/Tribune transaction under Section 7 of the Clayton Act, which requires the Division to determine whether the effect of an acquisition may be to substantially lessen competition, is ongoing."
If approved, the deal would create a local broadcasting behemoth reaching over 50% of the U.S.
In May, FOX Business reported that investors were concerned that the deal may not happen citing potential hurdles within the D.C. Circuit Court.
The FCC’s position comes just days after the Department of Justice filed to appeal AT&T’s $85 billion purchase of Time Warner.
AT&T CEO Randall Stephenson told FOX Business, immediately after the appeal was filed, he wasn’t surprised and that his team is focused on business. "The merger is closed," he said, adding that "we're about executing right now." When asked if he would take the case all the way to the Supreme Court, if necessary, he said, "Well of course, but we don't anticipate that."
Lydia Moynihan contributed to this report.
