ICLE Scholar Gus Hurwitz on Sinclair Broadcast Group Inc.’s Purchase of Tribune Media Co. in Bloomberg
In an interview with Bloomberg Gus Hurwitz explains that the FCC might accept divestitures in order to help certain deals go through:
It’s not clear whether Pai’s stance shows a cooling in his previous support for letting broadcasters share station management, for instance by handling advertisement sales or office support, or providing programming in return for a cut of the revenue. Critics have said such arrangements can amount to evasions of ownership rules; Pai has defended them as helping keep TV stations economically viable.
“We hope it is a big turnaround or awakening by Pai,” Matt Wood, policy director for the group Free Press that criticizes the sharing arrangements, said in an interview. “It could fall short of that.” Wood said the Chicago and Texas arrangements “seemed especially problematic, and transparently so.”
Robert McDowell, a Washington-based partner at Cooley LLP and former Republican FCC commissioner, said Pai’s action shows “that a required divestiture must be a true divestiture.”
The FCC isn’t signaling that shared service arrangements “are now somehow disfavored as a general matter,” McDowell said.
Gus Hurwitz, director of Law & Economics Programming at the International Center for Law & Economics, a policy group, said Sinclair’s difficulties show that the FCC will accept divestitures when needed to trim deals that otherwise would violate limits.
“So long as its not an illusory divestiture, I think parties shouldn’t worry about whether their transactions are going to go through — but it needs to be a real divestiture,” Hurwitz said in an interview.