FCC orders Sinclair to pay $48 million fine related to its failed merger with Tribune

Catherine Shu

Sinclair Broadcast Group has agreed to pay a $48 million fine to the Federal Communications Communication to close investigations related to its attempted merger with Tribune Media. The FCC said in its announcement that this is the largest civil penalty paid by a broadcaster in the agency’s history. It added that Sinclair will also have to "abide by a strict compliance plan in order to close three open investigations."

The merger, which was valued at $3.9 billion and would have created one of the largest broadcasters in the United States, was called off by Tribune in August 2018. Tribune also filed a lawsuit accusing Sinclair of breaching contract and misleading regulators "in a misguided and ultimately unsuccessful attempt to retain control over stations that it was obligated to sell."

In today’s announcement, the FCC said its agreement with Sinclair was related to investigations into the company’s disclosure of information related to the acquisition of Tribune-owned stations, its failure to identify sponsored content it produced for broadcast, and "whether the company has met its obligations to negotiate retransmission consent agreements in good faith."

In today’s FCC statement, chairman Ajit Pai, who was critical of the deal before it was scrapped, said "Sinclair’s conduct during its attempt to merge with Tribune was completely unacceptable. Today’s penalty, along with the failure of the Sinclair/Tribune transaction, should serve as a cautionary tale to other licensees seeking Commission approval of a transaction in the future."

He also added that the FCC would not revoke licenses granted to the conservative-leaning broadcaster. "On the other hand, I disagree with those who, for transparently political reasons, demand we revoke Sinclair’s licenses," Pai said. "While they don’t like what they perceive to be the broadcaster’s viewpoints, the First Amendment still applies around here."

In a statement, Sinclair Broadcast Group president and CEO Chris Ripley said that the company is "pleased with the resolution announced today by the FCC and to be moving forward. We thank the FCC staff for their diligence in reaching this resolution. Sinclair is committed to continue to interact constructively with all of its regulators to ensure full compliance with applicable laws, rules and regulations."