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Tribune CEO ‘Disappointed’ by FCC’s ‘Serious Concerns’ Over Sinclair Merger

Peter Kern tells employees to stay focused on their work in an internal memo

Tribune Media chief executive Peter Kern said he is “disappointed” the FCC is looking into stopping its $3.9 billion merger with Sinclair Broadcasting, according to an internal email shared with TheWrap on Tuesday.

Kern’s message comes after FCC chairman Ajit Pai said on Monday that he has “serious concerns” about the Sinclair-Tribune deal. Pai called into question Sinclair’s plan to sell several TV stations in an effort to appease regulators, saying that the deal would still allow Sinclair to control the stations. The Trump-appointed chairman proposed sending the merger to a hearing before an administrative law judge — putting the deal in regulatory limbo.

“The Chairman’s draft order designates certain issues related to our pending merger for an administrative hearing, and a majority of the commissioners have voted in support of the order,” said Kern in the email. “The order itself has not been made public, and thus we are not yet able to review it, determine the FCC’s specific areas of focus, and assess the timing of a resolution. Nonetheless, we are disappointed in this latest development regarding our pending transaction.”

The hearing proposed by Pai would push the merger back months, putting the deal in jeopardy. A draft of the FCC’s order said the merger may “involve deception,” according to Reuters.

“I know this latest development creates more uncertainty about our merger, but try to stay focused on the business and the audiences, advertisers and communities we serve, just as you have done throughout the year,” added Kern.

Tribune echoed its chief executive’s sentiment in a statement released on Monday. The company said it’s “studying” Pai’s statement, and “will review the FCC’s hearing designation order when released and expects to work with the FCC to explore ways to address the concerns identified.”

Before Monday, the merger had already ensnared the Trump-appointed FCC chairman. Pai has been under investigation from the FCC’s inspector general since late last year. Inspector general David L. Hunt is looking into whether Pai spearheaded a rules change in 2017 in cahoots with Sinclair Broadcasting. The new rules allow media companies to increase the maximum amount of television stations they own.

The FCC pulled back on regulations against media consolidation in April 2017. Weeks later, Sinclair announced a nearly $4 billion deal to acquire Tribune Media — an acquisition that wouldn’t have been possible a month earlier. Sinclair owns more TV stations than any other company in the United States. The merger would allow Sinclair to bolster its lineup in dozens of markets, including New York and Chicago.