Sinclair Revises Tribune Media Deal To Include WGN-TV

CHICAGO, IL — Sinclair Broadcast is amending its $3.9 billion Tribune Media Co. merger to counter concerns by the Federal Communications Commission over TV station ownership, including the acquisition of Chicago's WGN-TV. Under the revised plan, Sinclair would obtain WGN through its Tribune deal and would not sell the station to an outside party, the Maryland-based company said in a statement Wednesday.

Two Texas TV stations also would be placed into a divestiture trust under Sinclair's revised merger with Tribune Media, the statement said. These moves are part of Sinclair's efforts to respond to questions raised this week by FCC Chairman Ajit Pai, who has asked that the merger go before an administrative law judge at a hearing.

"Sinclair intends to request permission from the FCC to put the Dallas and Houston stations into a divestiture trust to be operated and sold by an independent trustee following the closing of the Tribune acquisition," the company said in a statement. "Sinclair expects to have identified and entered into a purchase agreement with a third party buyer or buyers for the Dallas and Houston stations prior to closing. As a result of the withdrawal of the application relating to WGN, Sinclair will simply acquire that station as part of the Tribune acquisition, which is, and has always been, fully permissible under the national ownership cap."

Sinclair announced a deal to buy Tribune Media in March. If approved, the sale would create the largest TV broadcast group in the country combining Tribune's stations with the more than 170 outlets owned by Sinclair.

More Patch Coverage:

• WGN-TV To Be Sold To Allow Sinclair-Tribune Media Merger Filing
• Tribune Media Sold To Sinclair Broadcast Group For $3.9 Billion
• Tribune-Sinclair Merger Hits Snag As FCC Asks For Hearing

The FCC's concerns stem from Sinclair's initial plan to sell WGN and other stations in order to be in line with federal TV station ownership regulations, which say a company can't own outlets that reach more than 39 percent of U.S. TV households. Sinclair said it would sell WGN to an outside buyer with close ties to the company. The broadcaster, however, would still manage the station even though it didn't own it.

"The evidence we've received suggests that certain station divestitures that have been proposed to the FCC would allow Sinclair to control those stations in practice, even if not in name, in violation of the law," Pai said in a statement Monday. "When the FCC confronts disputed issues like these, the Communications Act does not allow it to approve a transaction."

Sending deals before a judge at a hearing has killed proposed sales in the past. Paul Sweeney, a Bloomberg Intelligence analyst, told the news outlet that Pai's suggested delay could be the kiss of death for the Sinclair-Tribune merger.

"Historically, Sinclair has been very successful pushing the edge of the envelope with the FCC," he said. "In this case, it looks like the FCC is prepared to shove back."

How Sinclair's new plan will affect its purchase might not be known until the hearing, which has not been scheduled.

Go to Sinclair Broadcast's website to read the company's full statement about its revised plan.

Image via WGN-TV