March 5, 2019 / 8:11 PM / 3 months ago

U.S. judge drops hearing into Sinclair after failed Tribune merger

WASHINGTON (Reuters) - A U.S. administrative law judge has dropped a hearing into Sinclair Broadcast Group Inc’s $3.9 billion bid to purchase Tribune Media Co because the deal had failed and further proceedings would be an “academic exercise.”

But Administrative Judge Jane Halprin said in an order released on Tuesday allegations that Sinclair, the largest U.S. broadcast station owner, may have misled regulators “are extremely serious charges that reasonably warrant a thorough examination.”

Tribune terminated the sale of 42 TV stations in 33 markets to Sinclair, which has 192 stations, in August. A month earlier the Federal Communications Commission referred the deal for a hearing, questioning Sinclair’s candor over the planned sale of some stations and suggesting Sinclair would effectively retain control over them.

The collapse of the deal, which was backed by U.S. President Donald Trump, potentially ended Sinclair’s hopes of building a national conservative-leaning TV powerhouse that might have rivaled Twenty-First Century Fox Inc’s Fox News.

Halprin said the terminated deal meant “a hearing at this time in the context of this proceeding is an academic exercise.” But she added “that is not to say that Sinclair’s alleged misconduct is nullified or excused by the cancellation of its proposed deal with Tribune.”

She said the issue could be raised again in a future FCC proceeding, such as a Sinclair license assignment, transfer, or renewal.

Sinclair welcomed the decision to dismiss the hearing order. “We continue to maintain that we were completely candid, transparent and honest with the FCC during its review of our proposed acquisition of Tribune Media,” it said on Tuesday.

After the deal collapsed, the FCC’s Enforcement Bureau said it did not oppose dismissal of the hearing proceeding.

FCC Commissioner Jessica Rosenworcel, a Democrat, said on Tuesday that “in light of our earlier unanimous finding that there were issues of lack of candor and misrepresentation with this licensee the FCC should not turn a blind eye — we should open an investigation.”

Nexstar Media Group Inc said in December it will buy Tribune in a $6.4 billion deal that would make it the largest regional U.S. TV station operator. The deal is under review by the Justice Department and the FCC.

Democrats accused Sinclair of slanting news coverage in favor of Republicans. Trump last year criticized the Republican-led FCC for not approving the Tribune deal, saying on Twitter it “would have been a great and much needed Conservative voice for and of the People.”

Reporting by David Shepardson; Editing by Susan Thomas

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