Correction: An earlier version of this story incorrectly reported that FCC Chairman Ajit Pai had found that Sinclair had exhibited a “lack of candor” in describing its proposed divestitures. In fact, the FCC said there were “material questions” over whether Sinclair exhibited a “potential misrepresentation or lack of candor” and asked an administrative law judge to make a determination. The earlier version also failed to note that Sinclair disputes the assertion that it had made a deal with the Trump campaign for access in exchange for better coverage. The story has been updated.
President Trump came to the defense of Sinclair Broadcast Group’s proposed merger with Tribune Media, days after the Federal Communications Commission raised “serious concerns” about the deal and began legal proceedings to challenge it on grounds the companies had misled regulators.
Trump said Tuesday that it was “So sad and unfair” that the FCC, an independent agency, did not approve the merger, a $3.9 billion transaction that would create a conservative television giant that originally hoped to reach roughly 70 percent of U.S. households.
In his tweet, the president stressed how the deal would provide a “conservative voice for and of the People," though politics are not supposed to factor into merger considerations.
“Liberal Fake News NBC and Comcast gets approved, much bigger, but not Sinclair. Disgraceful!” the president tweeted.
Trump’s remark could inflame a high-stakes merger proceeding that is already rife with accusations of political cronyism. And it comes amid a broader debate concerning the treatment of conservative speech in places such as college campuses and social media, which right-wing advocates say is biased against Republicans. By becoming the nation’s largest broadcaster, Sinclair stands to become a potent tool in that cultural battle by injecting its conservative programming into millions of additional homes nationwide. Sinclair’s original proposal saw the company reaching 233 stations in 108 markets.
Last week, however, the FCC — led by Ajit Pai, a Republican whom Trump appointed to lead the telecom agency — said “material questions” exist as to whether Sinclair had exhibited a “potential misrepresentation or lack of candor” by seeking to skirt the U.S. government’s restrictions on media ownership by divesting key stations in cities such as Chicago to allies of Sinclair. The agency then asked an administrative law judge to make a determination.
Trump compared the proposed tie-up to Comcast’s purchase of NBCUniversal in 2011, a much different deal — one that combined a cable giant and a content powerhouse — that the FCC had approved. Trump previously has blasted that merger on the campaign trail.
Asked Wednesday whether he agreed with Trump’s tweet by members of Congress, Pai simply said he stood by the FCC’s decision to submit the merger for review.
The deal has not officially been blocked. A spokesman for Sinclair did not immediately respond to a request seeking comment.
Democratic Commissioner Jessica Rosenworcel, in a brief tweet of her own Tuesday night, quickly responded to Trump’s comments: “Disagree.”
Top Republicans on the congressional committees overseeing the FCC didn’t immediately respond to requests for comment.
Trump’s tweet comes ahead of a legal battle over Sinclair’s merger, while potentially casting a political pall over other efforts by his administration to review major business transactions. Previously, the president took aim at AT&T’s since-approved bid to buy Time Warner, criticizing it months before the Justice Department challenged the tie-up on grounds that it would harm consumers and competition.
Sinclair announced its bid to buy Tribune in May 2017, spurred on by the arrival of Trump in the White House and Pai at the FCC, which quickly began relaxing regulations on the telecom industry — and the companies that broadcasters could own.
For example, Pai moved to allow more consolidation among TV stations last year by restoring an FCC accounting method known as the UHF discount. Under the discount, broadcast companies can own more stations before bumping up against a national audience cap limiting their reach to 39 percent of U.S. households. On Wednesday, a federal appeals court dismissed an effort by consumer advocacy groups challenging Pai’s decision.
That court ruling is a victory for Sinclair, even as its deal undergoes legal review. The company’s merger proposal depends on the UHF discount to stay compliant with the FCC’s national audience cap; after factoring in the discount, Sinclair has said, the combined company will reach 38.9 percent of U.S. households.
Some of Pai’s critics, including Democrats in Congress, have highlighted these and other policy moves in questioning the chairman’s relationship with the conservative broadcasting giant.
“We hope this letter will serve as an opportunity to respond to reports suggesting that you have failed to exercise adequate independence as FCC Chairman and that may have resulted in the agency giving unusual and possibly preferential treatment to Sinclair,” Reps. Frank Pallone Jr. (D-N.J.), Mike Doyle (D-Pa.) and Diana DeGette (D-Colo.) wrote in a letter to Pai last year.
Even before the government began reviewing the deal, Sinclair boasted close ties to the Trump administration: Sinclair struck a deal with Trump, then a candidate, for access to him in exchange for better media coverage, Politico reported in 2016, and the conservative network currently employs Boris Epshteyn, who had served Trump in the White House. The FCC’s own inspector general later opened an investigation into the matter. Sinclair has denied the existence of such a deal.
For the deal, Sinclair had offered an ambitious proposal: a new conservative behemoth that could have reached 233 stations across 108 markets, well more than what’s currently allowed under federal law. To satisfy the government’s limits on media ownership, though, Sinclair offered to divest some stations, including WGN in Chicago and others in Houston and Chicago.
But Pai’s FCC — after more than a year of studying the proposed merger — found some of Sinclair’s proposals to be suspect given that it proposed to divest stations such as WGN to individuals who already had a relationship with the broadcaster. Last week, the agency asked an administrative law judge to review “whether Sinclair engaged in misrepresentation and/or lack of candor in its applications” with the FCC.