The biggest owner of local TV stations just got bigger — and 21st Century Fox may have left the door open to the rise of a competitor. Sinclair reached a deal to acquire Tribune Media, adding dozens of local stations to its line-up as well as superstation WGN’s cable reach. Sinclair’s bid came just a few weeks after a friendly ruling by the FCC, as Reuters notes:

U.S. broadcaster Sinclair Broadcast Group Inc said on Monday it would buy Tribune Media Co, one of the largest U.S. television station operators, for about $3.9 billion cash and stock, and assume about $2.7 billion in debt.

The $43.50 per share offer represents a nearly 8 percent premium to Tribune’s Friday close. Shares of Tribune, which operates 42 television stations in 33 markets, rose 5.2 percent to $42.40 in early trading on Monday. …

The announcement of the deal comes weeks after the U.S. Federal Communications Commission voted to reverse a 2016 decision that limits broadcasters owning stations serving no more than 39 percent of U.S. television households.

The $3.9 billion deal has some wondering whether Sinclair may stitch together a conservative news network to rival Fox. Sinclair already owns 173 local news stations, and the Tribune purchase will push that number to 215.  CNN raises the possibility, although not in its initial video report from media analyst Brian Stelter:

Sinclair beat out another local station ownership group, Nexstar, in the Tribune auction process. 21st Century Fox and Blackstone Group explored a joint bid, partly to block Sinclair’s move, but Fox ultimately didn’t make a bid, according to sources familiar with the matter.

There has also been speculation that Sinclair, with the addition of Tribune’s portfolio, could try to launch a rival to Fox News, though the company has not commented on the possibility.

Sinclair has been scrutinized over the years for its corporate ties to Republican politicians and its on-air support for conservative causes.

The potential to create a new broadcast network exists with this new acquisition, at least theoretically, but it seems very unlikely. Most of Sinclair’s existing stations are outside of major markets, which is one reason they were so interested in Tribune, which has big stations in New York, Los Angeles, and Chicago. That would certainly give a new network a lot of penetration, but part of the problem for Sinclair is that a lot of its business and content come from affiliations with existing networks. A look at its current line-up of stations shows that many of those have network affiliations, including a large number of Fox outlets. Disaffiliating this many stations to launch their own network would seriously impact Sinclair’s value in the short run — not a great look for a company that just took on an addition $2.7 billion in debt. Even if they do gain cable-systems access via WGN, it will take a tremendous amount of start-up capital to hire talent and build the infrastructure necessary to offer a competing conservative cable network, and now Sinclair’s spent $4 billion on stations instead.

The bigger issue here is continued media consolidation, and consolidation in general. Consolidation might be a free market mechanism, but it comes with costs to the free market as well, usually in the form of cronyism and rent-seeking regulation that distorts both markets and politics. We should be looking for less consolidation and more small players in these markets, not less access to them by small investors. It seems doubtful that we’ll get anything except laissez-faire policies on mergers and acquisitions from a Trump administration, but conservatives need to start considering a more aggressive anti-trust posture to keep both business and government from getting too big. It’s too bad that Sinclair might not be on that side of the divide now.