Sinclair Broadcast Group said Wednesday that it is restructuring its merger plans involving Tribune Media, after federal regulators this week raised suspicions that parts of the deal could be illegal.
As part of the acquisition, the conservative programmer will no longer sell off stations in Chicago, Dallas and Houston as it had proposed, the company said in a statement. Instead, it will seek to retain control over WGN in Chicago and authorize an independent trust to spin off two other stations on its behalf in Dallas and Houston.
Sinclair’s proposed changes to its $3.9 billion acquisition — which involves dozens of Tribune stations — aim to mollify regulators at the Federal Communications Commission, whose chairman, Ajit Pai, said Monday that he had “serious concerns” over the deal. Pai said Sinclair’s existing proposal risked violating federal rules designed to prevent any one broadcaster from becoming too powerful. Sinclair’s plan, Pai said, would potentially let the company retain effective control over the stations it spun off, by selling the assets to entities with close ties to the broadcasting giant.
Pai’s announcement marked a stunning shift from his previous moves making it easier for broadcasters to consolidate, and signaled that the agency could block Sinclair’s ambitions to become the nation’s largest TV broadcaster.
The FCC’s blessing is critical to Sinclair’s deal. The merger, announced last year, could give Sinclair control over 215 local TV stations in more than 100 markets nationwide, giving it direct access to millions of Americans through over-the-air broadcast signals.
“We call upon the FCC to approve the modified Tribune acquisition in order to bring closure to this extraordinarily drawn-out process and to provide certainty to the thousands of Tribune employees who are looking for closure,” Sinclair said in its statement Wednesday.
The FCC declined to comment.