Lawsuits filed against Sinclair, Tribune as Justice Department probes collusion

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(Photo: Handouts / The Desk)

A series of reports on the Justice Department’s investigation against Sinclair Broadcasting Group, Tribune Media and other broadcasters have prompted a series of class action lawsuits on allegations of collusion between the companies.

Last week, Variety Magazine and the Wall Street Journal reported the Justice Department was exploring whether or not advertisement sales teams at the broadcasters illegally shared information with each other in an attempt to raise ad rates.

Earlier this week, a federal lawsuit was filed in Chicago on behalf of an Alabama-based law firm that alleges the collusion caused them to pay more for advertising space. The lawsuit names both Sinclair and Tribune as defendants along Gray Television, Tegna, Hearst and Nexstar, Variety said.

A second class action lawsuit was filed in Maryland, where Sinclair is headquartered, on behalf of an Arkansas law firm. That suit named only Sinclair and Tribune as defendants.

A Sinclair spokesperson told the Journal that the Justice Department’s investigation was focused on the broadcast industry at large and was not specific to the company or its proposed merger with Tribune. However, the Chicago Tribune reported that the investigation stemmed from the Justice Department’s Antitrust unit as part of its scrutiny into the Sinclair-Tribune deal.

The merger has been complicated by the Federal Communication Commission’s decision to refer the matter to an administrative judge for review after determining Sinclair was not completely forthright in its intention to divest certain stations in order to gain regulatory approval. The FCC said Sinclair’s plan for stations like Chicago’s WGN-TV (Channel 9) would allow the company to sell the station while continuing to operate and profit from them.

Sinclair has also been accused by critics of withholding material relevant to the merger, including hundreds of documents that related to the controversial divestiture plans. In May, the American Cable Association lobbyist group accused Sinclair of attempting to conceal discussions that were had with Tribune and other operators over the planned selloff of the stations.

A Sinclair spokesperson denied the company misled the FCC and refuted claims that it withheld material related to the merger.