Sinclair 'sidecar' deals for Tribune's Chicago and NYC stations draw extra FCC scrutiny

Sinclair TV station map
Sinclair TV station map. (Sinclair)

The FCC is cracking down on Sinclair’s plan to spin-off television stations in Chicago and New York as part of its proposed $3.9 billion acquisition of Tribune Media.

According to the Wall Street Journal, the “sidecar” deals to sell Tribune’s WGN-TV in Chicago for $60 million and WPIX-TV for $15 million are raising red flags at the FCC because both potential new owners have close ties to Sinclair and Executive Chairman David Smith.

WGN-TV would be sold to a newly formed company headed by Steven Fader, CEO of Atlantic Automotive, a Maryland auto dealership group in which Smith holds a controlling interest.

WPIX-TV would be sold to Cunningham Broadcasting, which is owned by the estate of Smith’s mother, Carolyn Smith. Both deals retain Sinclair as the programming and service provider for the stations and include options for Sinclair to buy back the stations.

The FCC is reportedly pushing for Sinclair to make more space between itself and the two stations, which Sinclair is selling in order to comply with the national audience reach cap.

RELATED: Sinclair plans $60M sale of WGN-TV to chairman's business partner

The heightened scrutiny at the FCC comes shortly after FCC Commissioner Jessica Rosenworcel spoke out against the merger and FCC rule changes that seemingly favor Sinclair while providing a cryptic warning.

“Some of these policies are in need of updating—and there’s an honest conversation to be had about that. But collectively, they have the distinction of clearing the way for a transaction right now pending before the FCC. It’s a merger that could result in a single broadcast company—Sinclair—having the unprecedented ability to reach 72% of our nation’s households,” Rosenworcel said during the annual NAB show this week. “This is a company that is not only getting special treatment from the FCC—it’s getting a special call-out from the Executive Branch. This is important for all the reasons I’ve discussed today. So stay tuned.”