The Department of Justice is investigating whether TV station owners ran afoul of antitrust laws and inflated ad rates, according toThe Wall Street Journal, which said the investigation stemmed from DOJ's vetting of the Sinclair-Tribune merger.
DOJ's concerns about Sinclair's control of inventory in markets where it wanted to own two stations was one of the reasons Sinclair restructured its merger agreement, according to a source familiar with the review.
But the Journal story suggested the investigation was wider than just Sinclair and was looking into whether TV stations coordinated efforts in a way that raised prices, which would obviously implicate antitrust issues if true.
“It is our policy not to comment on a potential investigation," said Sinclair in a statement, adding: "It is our understanding that this is not specific to Sinclair but focuses on the larger broadcast industry.”
The Sinclair-Tribune deal is unlikely to go through after the FCC designated it for a hearing before an FCC administrative law judge, which usually sounds the death knell on such deals, though Sinclair has yet to throw in the proverbial towel.
But it might be waiting until after Aug. 8, at which time either Sinclair or Tribune can nix the deal without incurring a $135,500,000 break-up fee.
One analyst said it sounded like Justice doesn't want the deal to go through either. If so, that will give the President another agency to be mad at. He said it was "disgraceful" that the FCC did not approve the deal.
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