Tribune Media plunges after FCC says it has 'serious concerns' about Sinclair's $3.9 billion purchase of the company
- Sinclair's $3.9 billion takeover of Tribune Media may be in jeopardy.
- Trading of Tribune stock was halted twice as it fell more than 17% Monday following comments from the FCC.
- "Based on a thorough review of the record, I have serious concerns about the Sinclair/Tribune transaction," chairman Ajit Pai said in a statement.
- Follow Tribune Media's stock price in real-time here.
Shares of Tribune Media plunged as much as 17% Monday after the Federal Communications Commission said it had serious concerns about its proposed acquisition by Sinclair Broadcasting Group.
"Based on a thorough review of the record, I have serious concerns about the Sinclair/Tribune transaction," chairman Ajit Pai said in a statement.
He continued: "The evidence we've received suggests 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. When the FCC confronts disputed issues like these, the Communications Act does not allow it to approve a transaction. Instead, the law requires the FCC to designate the transaction for a hearing in order to get to the bottom of those disputed issues. For these reasons, I have shared with my colleagues a draft order that would designate issues involving certain proposed divestitures for a hearing in front of an administrative law judge."
Sinclair originally announced the $3.9 billion bid for Tribune's 42 TV stations back in May 2017. It's basket includes the cable network WGN America and several CBS, ABC, and Fox affiliates. It also has minority stakes in the Food Network and the website CareerBuilder.
The deal came just weeks after the FCC reversed a 2016 decision that limited how many TV stations some broadcasters can buy, Reuters noted at the time. Sinclair also said it may sell some stations in markets where it currently operates to comply with FCC antitrust regulations.
Shares of Sinclair sank 5.2% following the FCC's statement.