Remember when KUTV-Channel 2′s owners tried to buy the company that owned FOX 13? Remember how that deal got shot down because the Sinclair Broadcast Group lied and tried to cheat its way around FCC regulations?
That has resulted in a $48 million fine for Sinclair — the biggest ever levied by the Federal Communications Commission.
And yet the FCC actually let Sinclair off easy. The Republican-controlled commission voted 3-2 along party lines to approve a consent decree that is one more massive lie. It declares that Sinclair’s attempt to game the system and flout regulations was just sort of accidental. Really.
Here’s a brief history of what happened:
• In 2017, Sinclair (which owns KUTV and KJZZ, and operates KMYU) announced a $3.9 billion deal to buy Tribune Media (which owned FOX 13 and 41 other stations around the country).
• The combined Sinclair-Tribune Media group would have exceeded the limit on national ownership — by a lot. The limit is stations that reach 39% of the country; the combined company would have reached 72%. And it would have violated dual-ownership rules in multiple markets, including Salt Lake City. Normal, ethical business practice in similar deals has been to sell off or trade stations to comply with FCC rules.
• After first declaring it wouldn’t have to sell any stations, Sinclair eventually announced several sales. But many were not-so-veiled attempts to get around/ignore the rules — sales to close friends and associates of the Smith family, which controls Sinclair. And at far below market value.
Just two examples: Sinclair proposed selling New York’s WPIX for $15 million to a company owned by the estate of David Smith’s late mother. Nexstar (which eventually bought Tribune Media) later sold WPIX to Scripps for $75 million — ironically, so it could meet FCC ownership regulations. And Sinclair proposed selling Chicago’s WGN to a car dealer who was a close friend of David Smith’s. In both cases, Sinclair would maintain control of the stations and have options to buy them back.
This was clearly an attempt to flout FCC regulations. Any idiot could see that Sinclair was trying to cheat. And, yes, the lies it told put the kibosh on the deal. Not only was Sinclair fined $48 million, but it was forced to settle a lawsuit filed against it by Tribune Media for $60 million and a station in Kentucky.
(Well, the settlement went to Nexstar — the parent company of KTVX-Channel 4 and KUCW-Channel 30 — which bought Tribune Media after the Sinclair deal fell through. Nexstar also sold FOX 13 to Scripps. Also, Tribune Media is in no way associated with The Salt Lake Tribune.)
But here’s where Sinclair got off easy: The FCC’s consent decree states that “Sinclair structured its transaction based upon a good-faith interpretation of the commission’s rules and precedent.”
Really. Selling stations to your late mother’s estate and various friends and allied companies was a “good-faith” attempt to follow the rules. It’s ludicrous. And the FCC knows it. Chairman Ajit Pai issued a statement that “certain station divestitures that have been proposed to the FCC would allow Sinclair to control those stations in practice, even if not in name, in violation of the law.”
Why does this matter? Because a number of public-interest groups were preparing to challenge Sinclair’s station licenses. And questions should have been asked in a public forum about whether a company that lied and cheated should hold the rights to the public airwaves. The FCC is supposed to take character into consideration when it grants licenses.
Oh, and if the failed Tribune Media deal isn’t enough, multiple Sinclair stations also aired paid advertising on newscasts without identifying it as such (another FCC violation), and the company was facing an investigation into its dealings on retransmission consent with cable and satellite TV companies.
Maybe Sinclair could’ve made a case for itself and the reforms it insists it has instituted. But it should have had to do that publicly.
Republican commissioner Brendan Carr claimed the two Democratic commissioners — Jessica Rosenworcel and Geoffrey Stars, who strongly dissented — were playing politics because of Sinclair’s long history of warping its “news” to fit its owners’ right-wing political agenda. And it sure looks like politics actually were involved in this.
Because the three Republicans on the commission — Carr, Pai and Michael O’Rielly — protected Sinclair from further scrutiny and let the company off easy.