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Critics: Sinclair May Use Shell Companies to Dodge Merger Rules

The Trump FCC's decision to gut media consolidation rules specifically to aid Sinclair Broadcasting has received widespread, bipartisan condemnation and an FCC investigation into potential corruption. Critics have charged the $3.9 billion deal would result in Sinclair owning 233 local-TV stations to dominate the media landscape across 73% of the country, reducing overall competition and diversity in the media space.

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Sinclair's "news" reporting has been routinely criticized as distorted and factually challenged on a good day, even by many employees. And its explosive growth comes during a national conversation on how to improve the sagging quality of national discourse, especially among massive media conglomerates with growing influence.

Sinclair's now promising to sell off some of the acquired networks in New York and other large markets in order to reduce the impact of the deal and remain under the existing ownership caps.

But critics of the megamerger say Sinclair's plan to appease regulators involves effectively selling those networks to itself via a number of shell companies owned by Sinclair.

"It's not clear to me who the new owner is going to be from the documents filed, but it sure looks like business as usual for Sinclair, which has long specialized in propping up shell companies to evade FCC rules," consumer group Free Press said of the proposal. "The idea that Armstrong Williams or Cunningham or whoever they are setting up as the ‘owner’ of these stations is independent from Sinclair, at least if the past is any guide, is a complete fiction."

"Sinclair should not be allowed to set up shady front companies to evade the congressionally mandated ownership caps," the group added. "But Ajit Pai's FCC is aiding and abetting this ruse in every way."

Pai's fellow Commissioners Mignon Clyburn and Jessica Rosenworcel didn't mince words when discussing Ajit Pai's preferential treatment of Sinclair.

"Every element of our media policy is custom-built for the business plan of Sinclair Broadcasting," says Rosenworcel. "That is stunning, it is striking, and it looks like something’s wrong. And I’m not the only one to think that. We’re burning down the values of media policy in this agency in order to service this company."

For those interested, Free Press penned a blog post detailing the shell games Sinclair is playing here in greater detail.

Most recommended from 31 comments


Tchaika
join:2017-03-20
New Orleans, LA

Tchaika

Member

Remember this the next time people are talking about AT&T/Time Warner.....

Conservative Media Consolidation: Good
Apolitical (no, CNN is not Liberal no matter what the right-wingers think) Media Consolidation: Bad
Roadkill
Premium Member
join:2008-06-17
united state

Roadkill

Premium Member

Rabid busnesses

American big businesses are running rabid because they are allowed to do so. The mega-business guys couldn't care less who is in charge. As long as Mr. Big Bux bought the political clowns that will take all their orders for greed. Money is in charge of our government and will always be in charge until we become extinct, that is The American Way.
Ostracus
join:2011-09-05
Henderson, KY

Ostracus

Member

Area of effect.

I imagine consolidation would affect a lot of cord-cutters since local TV is one of the alternatives.