Sinclair/Tribune Approval Expected in Next Few Months
FCC and DOJ approvals of Sinclair buying Tribune are expected in the next few months, industry officials told us. DOJ is considered close to working out an agreement with Sinclair (see 1711300063), and it’s common for FCC approval of a transaction to follow closely after Justice, lawyers said. Though Sinclair/Tribune as filed would leave the combination above the national ownership cap, the companies are widely expected to divest and come in under the cap before transaction approval (see 1711210044).
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A pending notice of apparent liability (see 1712150051 and 1712180064) against Sinclair isn't necessarily a further sign the deal could soon be resolved, said industry and FCC officials. The timing of the enforcement action may have little to do with the deal, they said. Investigation of advertising sponsorship at Sinclair has been ongoing for some time, and that may have motivated the pending action rather than the transaction, one said. The agency is sometimes subject to statutes of limitations on unresolved items, Fletcher Heald attorney Dan Kirkpatrick said. Since the pending item is only at the NAL stage, it could take months to resolve the enforcement proceeding, an official said.
It’s not uncommon for the FCC to resolve enforcement issues when a deal is pending, said Wilkinson Barker broadcast lawyer Howard Liberman. “They don’t want to approve a merger with an outstanding violation.” When a transaction is pending, the FCC has leverage, he said. Sinclair has said it expects to resolve negotiations with DOJ this year (see 1710060055). The DOJ, FCC and company didn’t comment.
FCC action on the national cap isn't expected soon, so it’s unlikely Sinclair/Tribune will benefit from changes to the ownership limit (see 1711210044). Though Sinclair/Tribune’s original transfer applications included language asking that it benefit from any changes to ownership rules while the deal is pending, that’s unlikely to apply to the national ownership cap. It’s considered unlikely the FCC will approve Sinclair/Tribune over the 39 percent limit, and buyers of any divestitures are unlikely to agree to deals that include clauses to unwind them if the cap changes, industry officials said. The text of the NPRM seeking comment on changes to the national ownership cap was released Monday, and appears to include no significant alterations from the draft version, as expected (see 1712140054).
Though unclear when the FCC will act on the multibillion-dollar deal, the agency has been known to issue controversial decisions near holidays, Liberman observed. He “wouldn’t be surprised” to see the agency act on controversial matters such as the transaction close to Christmas or New Year’s.