FCC warns of future probe into Sinclair allegations

FCC warns of future probe into Sinclair allegations
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The Federal Communications Commission (FCC) on Tuesday wrapped up its review of the abandoned merger between Sinclair Broadcast Group and Tribune Media but warned that the agency could investigate allegations that Sinclair misled regulators while seeking approval for the deal.

The FCC's administrative law judge said in an order Tuesday that the “extremely serious charges” may merit a serious investigation.

“Absent a specific transaction or other proceeding to provide context for this unresolved character issue, however, conducting a hearing at this time would not be a prudent use of Commission time and resources,” the judge, Jane Hinckley Halprin, wrote.

Sinclair’s merger, which would have allowed it to reach nearly three-quarters of the nation’s television audience, collapsed last summer after the FCC rejected the deal and referred it to the administrative judge over concerns about some of the side transactions the conservative broadcaster had proposed to bring itself in line with media ownership restrictions.

One of them was a proposed sale of the valuable WGN-TV to a man named Steven Fader for a price that was considered well below market value and with terms that would effectively allow Sinclair to remain in control of the station. And Sinclair’s executive chairman owned a stake in Fader’s Maryland car dealership, the FCC alleged.

“The Commission made the right decision when it designated this transaction for a hearing, and we appreciate the ALJ’s work on this matter,” a spokesperson for FCC Chairman Ajit Pai said in a statement.

Sinclair said in a statement that it was “pleased” the judge dismissed the proceeding.

“We continue to maintain that we were completely candid, transparent and honest with the FCC during its review of our proposed acquisition of Tribune Media,” the company said.

But advocates who had fought the merger called on the agency to follow up with an investigation and revoke Sinclair’s broadcast licenses if it was found to have lied.

“The FCC’s administrative law judge could have dismissed the proceeding on procedural grounds without further comment, but instead she issued a strong rebuke regarding Sinclair’s dishonest representations to the FCC, and all but insisted that the agency examine Sinclair’s lack of candor at the next opportunity,” Dana Floberg, the policy manager at consumer group Free Press, said in a statement.

“The agency must investigate these apparent misrepresentations and hold Sinclair accountable,” Floberg added.