• by Karlene Lukovitz  @KLmarketdaily, May 7, 2020

Sinclair Broadcast Group has agreed to pay a record $48 million civil penalty and abide by a “strict compliance plan” to close three open Federal Communications Commission investigations.

The penalty is the largest ever imposed on a broadcaster in the agency’s 86-year history, and twice the previous record fine for a broadcaster — $24 million paid by Univision in 2007 — according to the FCC.

The consent decree closes an investigation into Sinclair’s disclosure of information during its failed attempt to acquire Tribune Media for $3.9-billion in 2018. The deal would have given Sinclair, already the country’s largest owner of local TV stations, reach into seven in 10 American households, creating “a new national conservative voice” rivaling that of Fox News, observed The New York Times.

It also closes investigations into whether Sinclair “has met its obligations to negotiate retransmission consent agreements in good faith,” according to the FCC’s announcement of the consent decree.

“Sinclair’s conduct during its attempt to merge with Tribune was completely unacceptable,” FCC Chairman Ajit Pai stated. “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.

In addition, the decree closes an investigation of Sinclair’s failure to make required disclosures for paid programming. “The programming in question was broadcast more than 1,700 times, either as stories resembling independently generated news coverage that aired during the local news, or as longer-form stories aired as 30-minute television programs without identifying the true sponsor of the content (the Huntsman Cancer Foundation),” according to the FCC.

The agency said that it had already voted, in December 2017, to propose a fine of more than $13 million for these violations — the largest fine ever proposed for a sponsorship identification rules violation.

Chris Ripley, president and CEO Sinclair Broadcast Group, tweeted a statement (above) about the decree on Wednesday evening: “Sinclair is pleased with the resolution announced today by the FCC and to be moving forward. We thank the FCC staff for their diligence in reaching this resolution. Sinclair committed to continue to interact constructively with all of its regulators to ensure full compliance with applicable laws, rules, and regulations.”

Sinclair, controlled by David D. Smith, its chairman and son of Sinclair’s founder, was being criticized for its “must-run” editorial policies and “accused of engineering public relations gambits favoring the Trump administration,” notes the Times. A national controversy erupted in 2018, when its station anchors were ordered to read a prepared script that accused mainstream media outlets of foisting “fake news” on the public.

During the transaction process, Sinclair seemed confident it would have the backing of Trump-appointed FCC chairman Ajit Pai. Under Pai’s leadership, the FCC passed a rule change greatly increasing the number of stations a broadcaster can own — a change made just weeks before Sinclair announced the proposed merger with Tribune. The FCC’s inspector general subsequently opened an investigation into whether Pai’s influence in that case had been improper.

However, the FCC ended up questioning Sinclair’s plan for divesting stations in order to make the deal meet guidelines, which involved selling some stations to buyers with connections to Sinclair. In addition, Sinclair refused to abide by a Justice Department ruling that it would need to sell off stations in at least 10 markets.

Ultimately, Tribune terminated its merger agreement with Sinclair and ultimately sold to Nexstar Communications in December 2018 for about $6.4 billion.

In announcing the consent decree, the FCC's Pai also stated that despite Sinclair's conduct during the attempted merger with Tribune, he disagrees "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.” Pai did not elaborate further.