Tribune Cancels Sinclair Buyout, Files $1 Billion Lawsuit

Sinclair is the nation's largest local broadcaster, reaching about 4 in 10 US households through TV stations.

The $1 billion lawsuit, filed in Delaware Thursday, said Sinclair knew it was taking a substantial risk by concealing from the FCC information about its relationships with certain buyers, putting undue pressure on the regulatory process and putting the merger at risk.

"In light of (the FCC order), this transaction can not be completed within an acceptable time frame, if ever", Kern said.

'This uncertainty and delay would be detrimental to our company and our shareholders'.

Sinclair used "unnecessarily aggressive and protracted negotiations" with the Department of Justice and Federal Communications Commission over regulatory requirements, the Chicago company said, and it refused to sell the stations it needed to in order to gain regulatory approval.

"So sad and unfair that the FCC wouldn't approve the Sinclair Broadcast merger with Tribune", Trump tweeted.

Like many media stories these days, this one also has a political angle: In recent years, Sinclair and the Smith family have shown favor to President Trump and backed conservative messages.

Under the terms of the deal, Tribune and Sinclair had the right to call off the deal without paying a termination fee if it was not completed by August 8. "Instead, Sinclair fought, threatened, insulted, and misled regulators in a misguided and ultimately unsuccessful attempt to retain control over stations that it was obligated to sell".

The $3.9 billion acquisition was announced in May after Sinclair won the rights to Tribune Media at auction, which would have given Sinclair ownership or control of television stations in 72 percent of US markets, including majors like New York City, Chicago and Miami.

Last month, Pai said the merger would need to be reviewed by a judge in an administrative hearing - a huge setback for a deal that was announced in May of 2017.

Nexstar Media Group (NXST.O) and Twenty-First Century Fox Inc (FOXA.O), partnering with private equity, had considering buying Tribune before Sinclair announced its deal and are likely bidders, analysts have said.

Free media advocacy groups cheered the demise of the deal.

The deal could still come back together but for now, it looks to be dead.

The American Cable Association (ACA), which represents small- and medium-sized cable companies, also cheered Tribune's decision. As elaborated in the complaint we filed earlier today, Sinclair's entire course of conduct has been in blatant violation of the Merger Agreement and, but for Sinclair's actions, the transaction could have closed long ago. "Broadcasters are supposed to serve their local communities".

Vanessa Coleman

Comments