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Sinclair Broadcast Group changes Tribune deal after FCC raises legal concerns

Sinclair Broadcast Group changes Tribune deal after FCC raises legal concerns
Sinclair offers to take full control of WGN TV station in Chicago under its amended agreement with Tribune Media. (Scott Olson / Getty Images)

After the Federal Communications Commission expressed “serious concerns” about Sinclair Broadcast Group’s $3.9-billion deal to buy Tribune Media, the broadcast giant is amending its plan.

Sinclair’s deal to buy Tribune’s 42 broadcast outlets, including KTLA in Los Angeles, involves selling some of those stations in order to comply with the national limit on TV station ownership.

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Under the revised plan the Maryland company announced Wednesday, Sinclair would take full ownership of Tribune’s Chicago flagship WGN, and it would sell Tribune outlets in Houston and Dallas to a buyer with no ties to Sinclair.

Under its original deal with Tribune, which was announced in May 2017, Sinclair intended to transfer WGN to a limited partnership but would still have maintained control over the station’s operations. It also intended to sell KIAH in Houston and KDAF in Dallas to Cunningham Broadcasting. Sinclair has business ties to Cunningham, which critics have called a shell operation that enables Sinclair to get around limits on how many TV stations a single company can own.

Under Sinclair’s revised plan, the Houston and Dallas stations would instead go into a divestiture trust and be sold to another buyer.

The divestitures in the original deal raised red flags with FCC Chairman Ajit Pai, who said in a statement this week that Sinclair “would be allowed to control those stations in practice, even if not in name, in violation of the law.” He asked an administrative judge to review the legality of the divestitures.

Sinclair said it is amending the deal based on Pai’s comments and on media reports that speculated on the specifics of his concerns.

In a lengthy statement, Sinclair said it had never misled the FCC or withheld information over the nature of its relationships with the WGN limited partnership or Cunningham.

“We have fully identified who the buyers are and terms under which stations would be sold to such buyer, including any ongoing relationship we would have with any such stations after the sales,” Sinclair said. “Nonetheless, we have decided to move forward with the additional changes to satisfy the FCC’s concerns.”

Sinclair owns, operates or provides services to 215 stations in 102 markets and would gain more by buying Tribune. It plans to keep KTLA after the deal closes.

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