White House counsel asked FCC chair about Sinclair Tribune merger status

By David Shepardson

WASHINGTON (Reuters) - White House counsel Don McGahn called the head of Federal Communications Commission in July to ask about the status of Sinclair Broadcast Group Inc's now abandoned $3.9 billion acquisition of Tribune Media Co.

FCC chairman Ajit Pai disclosed the call in testimony on Thursday before a U.S. Senate panel. Pai said the call from McGahn came around the same time he issued a July 16 statement that said he had "serious concerns" about the proposed takeover and proposed referring the matter to an administrative law judge.

The call suggested unusual interest by the White House in the status of a planned acquisition by a company that President Donald Trump has publicly supported. Pai said that McGahn did not express a view on the merger. He said that the counsel had seen a news report "and wanted to know what ... the action was."

The collapse of the deal, hatched 15 months ago, potentially ended Sinclair's hopes of building a national conservative-leaning TV powerhouse that might have rivaled Twenty-First Century Fox Inc's Fox News.

Pai said on July 16 that evidence uncovered by the FCC suggested some proposed divestitures of stations by Sinclair would allow the company to control them "in practice, even if not in name, in violation of the law." He recommended the merger be referred for an administrative hearing. The FCC said later that Sinclair "did not fully disclose facts" about the merger.

The following week, Trump tweeted: "So sad and unfair that the FCC wouldn't approve the Sinclair Broadcast merger with Tribune. This would have been a great and much needed Conservative voice for and of the People." Trump also tweeted support for Sinclair in April.

Advocacy group Free Press said in an FCC filing in August 2017 that Sinclair forces its TV stations to "air pro-Trump propaganda and then seeks favors from the Trump administration." Sinclair has previously denied the charge that it is biased in favor of Republicans, and did not immedately respond to a request for comment on Thursday.

The White House did not immediately comment on the McGahn call.

Pai agreed to turn over a written summary of the conversation to Senator Richard Blumenthal, a Democrat.

Last week, Tribune terminated the deal and sued Sinclair for breach of contract, claiming the rival TV-station owner mishandled efforts to get the transaction approved by taking too long and being too aggressive in its dealings with regulators.

Sinclair, the largest U.S. broadcast station owner with 192 stations, said last week it would no longer pursue the Tribune merger and denied Tribune's allegations.

(Reporting by David Shepardson; Editing by Frances Kerry)