By David Shepardson
WASHINGTON (Reuters) - The U.S. Federal Communications Commission said on Monday it wants additional comments on Sinclair Broadcast Group Inc's (O:SBGI) planned $3.9 billion (£2.9 billion) acquisition of Tribune Media Co (N:TRCO) and disclosed it does not expect to make a decision before July 12.
Sinclair said in April it would divest 23 television stations in a bid to win government approval but would still need FCC permission to own more than one station in some markets. Sinclair, which is already the largest U.S. broadcast station owner, announced plans in May 2017 to acquire Tribune’s 42 TV stations in 33 markets, extending its reach to 72 percent of American households.
The FCC will take comments and responses through July 12. The deal also needs approval from the U.S. Justice Department.
Earlier this month, Sinclair chief executive Chris Ripley told investors he expects the deal to close by early in the third quarter.
The combined company plans to sell 14 Tribune stations and 9 Sinclair stations for $1.6 billion to win regulatory approval. The companies plan to sell the stations to Standard Media Group, Meredith Corp (N:MDP), Howard Stirk and Cunningham Broadcasting Corp.
The stations include WGN-TV in Chicago and stations in Denver, Cleveland and San Diego, and nine Sinclair stations, including outlets in Des Moines, Iowa; Salt Lake City; and Seattle.
Democrats have attacked FCC chairman Ajit Pai for what they claim are a string of FCC decisions benefiting Sinclair and a news media report that Trump’s election campaign struck a deal with Sinclair for favourable coverage. Pai has repeatedly denied he has taken actions aimed at benefiting Sinclair. Sinclair has also denied improper conduct.
A federal appeals court in Washington is currently considering a case on whether to strike down an FCC decision that allows companies to partially count some stations against a cap that does not allow any one company to serve more than 39 percent of U.S. television households.
Under rules adopted in 1985, stations with weaker over-the-air signals could only be partially counted against a broadcaster’s ownership cap. But in 2016, the FCC, under Democratic President Barack Obama, said those rules were outdated after the 2009 conversion to digital broadcasting, which eliminated differences in signal strength. Under Pai, the FCC revoked the Obama FCC decision.
If the FCC loses, it could impact how many stations Sinclair could acquire.
FCC Commissioner Jessica Rosenworcel said the FCC should not "rush ahead now before the court acts."