DOJ investigating TV station owners, including Sinclair and Tribune, for antitrust violations

The Department of Justice (DOJ) is investigating whether deals between television station owners inflate TV advertising prices in violation of antitrust law, the Wall Street Journal reported. More specifically, the probe is examining whether independent TV station owners, including the owners of Sinclair and Tribune, coordinated efforts between sales teams, leading to higher prices for TV commercials.

“Government officials stumbled across the alleged ad sales practice during their review of Sinclair’s $3.9 billion proposed acquisition of Tribune,” WSJ reported.

The DOJ investigation is the latest issue for Sinclair and Tribune. Last week, FCC Chairman Ajit Pai announced that he had “serious concerns” about the Sinclair-Tribune merger, and the Commission sent the $3.9 billion merger to an administrative review process. This move likely kills the massive media consolidation deal. But, perhaps more problematic for Sinclair is language included in the hearing order. The FCC charges Sinclair with “lack of candor” – a phrase that could lead to significant issues for Sinclair, whose license ownership includes a character qualification.

“We have raised issues about the candor of this company before the FCC and misrepresentations they made in the context of this transaction,” FCC Commissioner Jessica Rosenworcel said at an FCC oversight hearing this week. “I think those are serious issues of character qualification. […] To the extent they have been identified as a problem here, we should be open to investigation in other contexts as well.”

Links:

Justice Department Investigates TV Station Owners Over Advertising Sales (Wall Street Journal, July 26, 2018)

FCC sends Sinclair-Tribune merger to hearing, likely killing deal (Speed Matters, July 16, 2018)

Are Sinclair’s problems just getting started? (Politico, July 26, 2018)