Justice Department Investigating Local TV Station Owners Over Ad Sales — Report

The Justice Department is investigating whether local television station owners including Sinclair Broadcast Group and Tribune Media violated antitrust laws, according to the Wall Street Journal.

Investigators are examining whether local station owners co-ordinated efforts when their ad sales teams spoke with one another about performance — conversations that might have led to higher ad rates for TV commercials, the publication reports, citing sources.

A Justice Department spokesperson declined comment, as did a spokesperson for Tribune. Sinclair did not responded a requests for comment.

Government investigators reportedly stumbled across the alleged practice while examining Sinclair’s proposed $3.9 billion acquisition of Tribune. That deal has been referred to an Administrative Law Judge for review.

Recent weeks have marked a surprising turn of events for Sinclair, whose proposed acquisition of Tribune would give the already powerful media group staggering reach, with 233 television stations reaching more than 70% of American households. But its plans to sell some of Tribune’s stations to comply with the FFC’s ownership rules met with opposition from FCC Chairman Ajit Pai, who expressed “serious concerns” about the divestiture plans.

Of concern were proposed “sidecar agreements” that would allow Sinclair to retain control of stations without owning them.

Now, the merger deal goes before an Administrative Law Judge, an action that Republican FCC commissioner Michael O’Rielly called the vote a “de facto merger death sentence.”