FCC Moving Slowly on the Tribune Deal

Financial Times covers the logjam at the FCC over the Tribune (TRB) deal. As is the case with anything to do with politics, nothing is ever rational and one can never be sure what is going on in the backroom.

Tribune has warned the FCC that the takeover is at risk of collapsing if it does not receive regulatory clearance in the next two weeks.

But Kevin Martin, the Republican chairman of the commission, in private conversations, has said he is unwilling to address the matter before December 18, the date he has set for a vote on industry-wide changes to media ownership rules.


Putting it off until mid-December seems to be a political strategy:

Instead, in a move that some say reflects Mr Martin's reputation for being a calculating political operator, the commission chairman is pressing forward the broader media ownership overhaul.

People close to the FCC say they believe Mr Martin is holding up the Tribune deal for political reasons.

The transaction has won the backing of a handful of Democrats and they say Mr Martin believes delaying the deal will divide the Democrats and prevent them mobilising against the Dec-ember 18 vote on media ownership, which would negate the need for a separate Tribune waiver.

Mr Sheehan said: "The Democratic majority is butting up against the regulatory objectives of the Republican chairman of the FCC. My very real concern is [Tribune] being thrown overboard in that very macho stare-down."


According to what is stated in the article, Tribune is saying it needs 20 days from approval to close the deal. The deal needs to close by the end of the year or else there are all sorts of repercussions and the deal may fall apart.

As you may already know, I took a speculative risk arbitrage position a few months ago. I decided to add to that position today. Potential return is around 17%. I think it is a bit risky to add at this level because if the deal were to be re-negotiated, it would happen around this price (probably around $28 to $30). However, the broad market is down and I am not sure if the stock price will drop further.

TRB purchase price: $28.61 to $28.63

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