Sinclair Broadcast Group To Pay $48 Million Penalty To Close FCC Investigations

Ted Johnson
·4 min read

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Sinclair Broadcast Group will pay $48 million in a civil penalty — the largest imposed on a broadcaster in the FCC’s history — to close three open government investigations, including of its conduct as it sought to acquire Tribune Media in 2018.

The fines, however, do not revoke FCC licenses, a sanction that some critics of the broadcaster should be imposed given its alleged conduct during the Tribune transaction.

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“Sinclair’s conduct during its attempt to merge with Tribune was completely unacceptable,” FCC Chairman Ajit Pai said in a statement. “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. On the other hand, I disagree 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.”

The FCC did not disclose how the five-member commission voted on the penalty and settlement, but it was not unanimous. A spokesperson for Geoffrey Starks, a Democrat, said that he voted against the Sinclair settlement. The commission’s other Democrat, Jessica Rosenworcel, has opposed a previous penalty imposed on the broadcaster for being insufficient.

For years, Sinclair’s news programming has come under scrutiny, particularly for a practice mandating that stations run right-leaning commentary segments during local newscasts. The company ended those segments in December.

Sinclair owns, operates or has service agreements with 191 television stations in 89 markets. It’s proposed merger with Tribune Media, announced in 2017, would have made it even larger, with more than 200 stations across the country and a major expansion into the top 10 markets. But the merger was quickly met with opposition, as opponents focused on the company’s tactics in its effort to win regulatory approval for the transaction.

In July, 2018, the FCC announced that it was not approving the merger but instead sending it to an administrative law judge, concluding that there were “material questions” of whether Sinclair misrepresented itself or engaged in a “lack of candor” over its plan to divest stations and comply with media ownership limits. More specifically, they zeroed in on potential “sham” transactions in which Sinclair would sell stations, including WGN-TV in Chicago, to entities in which Sinclair chairman David Smith and members of his family still held an interest.

The next month, Sinclair and Tribune dropped their merger plan, and litigation between the two companies followed. Nexstar ended up acquiring Tribune. In January, Sinclair settled a lawsuit stemming from that merger, agreeing to pay Nexstar $60 million and to transfer control of a Lexington station.

In a statement, Sinclair President and CEO Chris Ripley said that they were “pleased with the resolution” announced by the FCC. “We thank the FCC staff for their diligence in reaching this resolution,” the company said. “Sinclair is committed to continue to interact constructively with all of its regulators to ensure full compliance with applicable laws, rules and regulations.”

In addition to the investigation of Sinclair’s conduct during the merger proceedings, the consent decree with the FCC includes the closure of other probes. That includes one into whether Sinclair met its obligations to negotiate retransmission consent agreements in good faith, and another over its failure to make required disclosure of the true sponsor of content that was made to look like news reports or longer form 30-minute presentations. In fact the true sponsor of the content was the Huntsman Cancer Foundation. The FCC already had voted to propose a fine of more than $13 million for the practice, as the programming in question was broadcast more than 1,700 times.

The penalty is twice of the previous record of $24 million, which was paid by Univision in 2007 to settle an investigation into the companies failure to meet children’s programming requirements.

When the FCC slapped Sinclair with the $13 million fine in 2017, two of the agency’s Democratic commissioners, Rosenworcel and Mignon Clyburn, opposed it as too lenient a penalty. Rosenworcel said at the time, “In light of this substantial history of failure to comply with our policies and the sheer number of violations before the agency now, the immediate notice should seek the highest fines permissible under our rules. But instead of doing so, we offer unreasonable and suspicious favor to a company with a clear record of difficulty complying with the law.”

Clyburn has since left the agency, and was succeeded by Starks.

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