Latest FCC Vote Could Stall or End Sinclair-Tribune Merger

The U.S. Federal Communications Commission voted Wednesday to refer Sinclair Broadcast Group to an administrative judge for a review of its planned $3.9 billion acquisition of rival Tribune Media, substantially lowering its chances for a positive outcome.

FCC chairman Ajit Pai proposed putting the deal under judicial review on July 16. The share prices of both companies have since fallen by double-digit percentage points.

Sinclair, already the largest TV station owner in America, has been criticized in the past for injecting conservative viewpoints into the news coverage of its 193 affiliate stations. A Tribune acquisition would increase its U.S. portfolio to 235 affiliates.

That means at least one Sinclair station would be available in 72% of American homes, Politico notes, despite a federal cap of 39% on audience size. Stations that broadcast using ultra-high frequency don’t fully count toward that restriction, Politico found, a loophole Sinclair could use to its advantage.

Sinclair reportedly tried to appease the FCC by offering to sell 23 stations as a part of the merger agreement, according to the New York Times, but was found to have had plans to keep control over the stations after the sale. Sinclair denied in court that it did not fully disclose facts about the acquisition.

Subscribe to Well Adjusted, our newsletter full of simple strategies to work smarter and live better, from the Fortune Well team. Sign up today.