August 27, 2018 / 8:15 PM / a year ago

CORRECTED-UPDATE 2-FCC report found no 'favoritism' on proposed Sinclair deal

(Corrects date in paragraph 4 to 2016, not 2017)

WASHINGTON, Aug 27 (Reuters) - The Federal Communications Commission’s inspector general concluded there was no evidence of impropriety relating to the proposed - and now defunct - merger of Sinclair Broadcast Group and Tribune Media Co , the U.S. regulator’s chairman said in a statement on Monday.

Two U.S. House Democrats in November last year asked the FCC inspector general to probe whether FCC Chairman Ajit Pai was biased in favor of Sinclair, which is seeking approval of a $3.9 billion acquisition of Tribune.

In a statement, Pai said he was pleased with the finding, adding that the suggestion that he favored any one company was “absurd.”

U.S. Representatives Elijah Cummings and Frank Pallone cited FCC decisions that benefited Sinclair, the largest U.S. television broadcast group, and a 2016 news report that the presidential campaign of President Donald Trump had struck a deal with Sinclair for favorable media coverage.

“I’m pleased that the Office of Inspector General has concluded that there was ‘no evidence, nor even the suggestion, of impropriety, unscrupulous behavior, favoritism toward Sinclair, or lack of impartiality related to the proposed Sinclair-Tribune merger,’” Pai said.

The FCC Office of Inspector General has not yet released the report, however, and a spokeswoman for Pai said the report’s release was at the discretion of the inspector general.

Sinclair announced plans in May 2017 to acquire Tribune’s 42 television stations in 33 U.S. markets as well as cable network WGN America, extending its reach to 72 percent of American households.

But the deal was scuttled earlier this month after the Republican-led FCC expressed opposition to the deal, when it questioned Sinclair’s candor over the planned sale of some stations, suggesting that Sinclair would effectively retain control over them. (Reporting by Chris Sanders, Ginger Gibson and David Shepardson; Editing by Dan Grebler and G Crosse)

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