FCC Forced To Fine Sinclair $48 Million For Bullshitting Regulators

Legal Issues

from the not-gonna-fix-the-bigger-problem dept

Last year when Sinclair attempted to acquire Tribune Broadcasting for a cool $3.9 billion, you might recall the company was accused of some highly dodgy behavior in order to get the deal done. Despite the FCC doing its best to neuter most media consolidation protections to help move the deal forward, the union would have still resulted in the merged company violating media ownership limits and dominating local broadcasting in a huge number of new markets.

To get around those limits, Sinclair allegedly got, uh, creative. Consumer groups accused Sinclair of trying to offload several of its companies to Sinclair-owned shell companies to pretend the deal would remain under the government’s ownership cap. The company also tried something similar in trying to offload some stations to friends and other partner companies at highly discounted rates, allowing it to technically not “own” — but still control — those stations.

It was all so dodgy that even the Ajit Pai FCC, which had initially been doing cartwheels to clear the way for the merger, had to back away from its support of the deal, shoveling deal approval off to an administrative law judge for review (aka the “kiss of death”). Tribune was then forced to kill the merger, and quickly thereafter filed a lawsuit against Sinclair for monumentally flubbing the deal.

Fast forward to this week, and the FCC has finally issued a $48 million fine for repeatedly misleading regulators. In a statement, FCC boss Ajit Pai criticized Sinclair, but also criticized those insisting the company’s broadcast licenses should be stripped away:

“Sinclair?s conduct during its attempt to merge with Tribune was completely unacceptable,? said FCC Chairman Ajit Pai. ?Today?s penalty, along with the failure of the Sinclair/Tribune transaction, should serve as a cautionary tale to other licensees seeking Commission approval of a transaction in the future. On the other hand, I disagree with those who, for transparently political reasons, demand that we revoke Sinclair?s licenses. While they don?t like what they perceive to be the broadcaster?s viewpoints, the First Amendment still applies around here.”

Sinclair is, of course, under “political” fire for the fact that the company has been hoovering up quality local news outlets and replacing them with what, in many instances, is little more than political propaganda, something exposed by that viral Deadspin video. Pai was, of course, fine with that aspect of Sinclair’s effort, which annoyed those trying to reform the media sector and the rules governing the use of (purportedly) publicly-owned airwaves:

Pai’s go to move is to always simply dismiss any criticism of his agency or industry as “political.” But there’s some very legitimate questions here about what it means to use citizen-owned airwaves to broadcast propaganda, especially given the consolidation in media has decimated quality local news broadcasts to a scientifically measurable degree. It’s a shift that plays a massive role in U.S. culture, resulting in a populace that’s less informed and more divided that ever. Oh, and it’s potent enough of a force that it can measurably impact elections.

Obviously Pai and Sinclair don’t care about this now because it’s working in their party’s favor politically. But it’s still a problem.

Meanwhile, it’s hard to over-state just how sleazy you have to be to force this industry-cozy FCC to issue such a fine. And while the fine is the biggest ever levied against a broadcaster by the FCC (which isn’t saying much), Sinclair will very likely have the fine reduced or eliminated completely when folks aren’t paying attention. The penalty also doesn’t come with any kind of meaningful reform. And the decades-old media consolidation rules (long enjoying bipartisan support) the FCC stripped away to help Sinclair (before it went off the rails) remain undone, meaning the core problem — consolidation and the erosion of quality, local broadcasting and journalism — is likely to only get worse.

Filed Under: fcc, fines, merger
Companies: sinclair, tribune broadcasting