The FCC has opened an inquiry into Sinclair over its aborted effort to buy the Tribune stations and whether it misled the commission about who would actually be controlling the stations it was spinning off as part of the deal.
That is according to a letter of inquiry (LOI) from the Media Bureau to David Gibber, SVP and general counsel of the broadcast group, according to a copy obtained by Broadcasting & Cable. The FCC wants tons of documents related to the sale and spin-offs.
The FCC designated the deal for a hearing in front of the FCC's Administrative Law Judge over concerns Sinclair had misrepresented the deal and showed a "lack of candor." Such designations are a death knell for a deal, as it was in this case.
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While the hearing was scrapped after the deal fell through, there was always the possibility the FCC would open an investigation into that misrepresentation charge, since it goes to the qualifications for holding any FCC licenses, and Sinclair has a bunch of them.
The FCC's new Administrative Law Judge, Jane Halprin, back in March had granted Sinclair's request that she terminate the hearing, but she also said the allegation that Sinclair may have misled the commission was a serious charge that warranted further scrutiny in another context. The Media Bureau has done just that.
Specifically, the bureau is investigating "whether, in light of the issues presented in the HDO, Sinclair Broadcast Group, Inc. (Sinclair or Company) was the real party-in-interest to the associated WGN-TV, KDAF, and KJAH applications, and, if so, whether Sinclair engaged in misrepresentation and/or lack of candor in its applications with the Commission."
The bureau wants deal-related documents from the company no later than July 9.
Sinclair had been criticized for sidecar deals with spin-off stations that would allow it to keep its hand in, and for the relationship of some of the potential new station owners to existing Sinclair officials.
“Based on a thorough review of the record, I have serious concerns about the Sinclair-Tribune transaction," FCC Chairman Ajit Pai said last year when designating the deal for hearing. "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."
