Sinclair Reportedly Clears Last Hurdle Before Closing Deal for Allbritton

By Kevin Eck Comment

sinclair_304The Wall Street Journal reports Sinclair Broadcast Group is moving closer to sealing its deal for Allbritton Communications by settling a lawsuit brought by the Department of Justice and the Pennsylvania Office of Attorney General.

The DOJ thought Sinclair’s purchase of ABC affiliate WHTM in a market where it already owns CBS affiliate WHP and CW affiliate WLYH would affect the cost of advertising in the market.

Last month Sinclair agreed to sell the station to Media General when the Allbritton deal is finalized.

“The rivalry between the stations has helped to constrain advertising rates, and without the divestiture, advertisers on stations in this area would likely have paid higher prices,” said Bill Baer, assistant attorney general in charge of the Justice Department’s Antitrust Division.

The settlement comes less than two weeks before a one-year clock will run out for Sinclair to get regulatory approval for its Allbritton deal. If approval isn’t reached in time, Sinclair has said the deal may not close.

The settlement will “pave the way in fact for a DOJ approval,” wrote Evercore analyst Doug Arthur. “Next stop: the FCC,” referring to the Federal Communications Commission.

The planned sale of the Harrisburg station is only the latest in a series of concessions that Sinclair—the biggest TV station owner in the U.S., by number of stations—has had to make on the Allbritton acquisition to please regulators. Struck at the peak of last year’s frenzy of consolidation among local broadcast stations, the acquisition has drawn intense regulatory scrutiny for the way it planned to sidestep the FCC’s media ownership rules through the use of “sidecar” companies in markets like Harrisburg, Charleston, S.C. and Birmingham, Ala. Since the deal was struck, the FCC has set new rules limiting the use of such sidecar agreements.

In May, Sinclair told the FCC it planned to shut down three stations in Charleston and Birmingham as a result of new FCC restrictions on sidecar agreements, to help facilitate approval for the Allbritton deal.