Why Sinclair’s latest plan to sell major TV stations has critics crying foul

Sinclair Broadcast Group's new plan to help it win federal approval to become the nation's largest broadcaster is pretty brazen, critics say. The Maryland-based company recently proposed selling two major TV stations to satisfy the government's ownership limit and secure its deal to buy Tribune Media for $3.9 billion. The problem with the arrangement, critics say, is that the stations' prospective buyers have close ties to Sinclair's executive chairman.

According to filings with the Federal Communications Commission, Sinclair plans to sell one station to an auto dealer who is a business associate of chairman David Smith and the other one to Cunningham Broadcasting Corp. The estate of Smith's mother owns Cunningham, according to the Baltimore Sun. The strategy is Sinclair's attempt to maintain control over the stations, critics say. “Sinclair has a long history of trying to evade the FCC's ownership rules,” said Craig Aaron, president of Free Press, an advocacy group that supports diverse media ownership. “This is the latest and most brazen example.”

If Sinclair receives regulatory approval from the FCC and the Department of Justice, then auto dealership executive Steven Fader would buy WGN in Chicago for $60 million.  Sinclair would also sell WPIX in New York to Cunningham for $15 million. Both federal agencies are reviewing the proposed tie-up because it involves the transfer of licenses and is large enough to warrant an antitrust review.  The sale prices set for the stations are well below what a business without ties to Sinclair would pay, Aaron said, pointing to the 2002 sale of WPWR in Chicago, for $425 million. He also emphasized that the sales agreements give Sinclair joint control over the stations and grant the company the ability to buy them back in the future. “In order to get under the national cap, Sinclair would pretend to sell these stations, but they have no intention of relinquishing any control,” Aaron said.