Tribune scraps $3.9 billion deal with Sinclair then sues for $1 billion

Tabitha Dunn
August 10, 2018

The failure of the proposed $3.9 billion merger ends a lengthy saga that generated widespread opposition over Sinclair's right-leaning editorial views and concerns about media concentration.

Tribune Media Company is ending its troubled merger deal with Sinclair Broadcast Group, less than a month after federal regulators cited "serious concerns" about the plan.

Sinclair Broadcast Group Inc. wanted the Chicago-based company's 42 TV stations and had agreed to sell nearly two dozen of its own to score approval by the Federal Communications Commission.

The breakup of the deal is a stinging defeat for Sinclair (SBGI), owner of dozens of local television stations.

"Sinclair engaged in unnecessarily aggressive and protracted negotiation with the Department of Justice and the Federal Communications Commission".

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

"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", Tribune said in its lawsuit, according to the statement.

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Some analysts think other companies could have interest in buying Tribune Media's stations.

The decision to cancel the business deal was made early Thursday morning, scuttling a $3.9 billion deal that would given the broadcasting group an even broader reach into American living rooms.

"Tribune's decision to pull the plug on the Sinclair merger is great news for consumers who will avoid paying the higher pay-TV rates the deal would have caused", ACA CEO Matthew Polka said. The FCC declined to comment on Thursday. But Tribune announced today "that it has filed a lawsuit in the Delaware Chancery Court against Sinclair for breach of contract".

Kern told employees in an email reviewed by Reuters that it was not clear what was next for Tribune.

The Sinclair Broadcast Group deal to acquire KTLA's parent company Tribune Media is over. Sinclair would have stations in Philadelphia, Washington, DC, Virginia, Indianapolis, Seattle, Sacramento, Milwaukee, Kansas City, Des Moines, Denver, Dallas, Houston, New Orleans, Memphis, Miami, Greensboro, Richmond, Des Moines, San Diego, Salt Lake City, Oklahoma City, St. Louis and more.

A dozen Senate Democrats said in April Sinclair was deliberately distorting news coverage by forcing local stations to read scripts that criticized what it described as "the troubling trend of irresponsible, one-sided news stories plaguing our country". By one estimate, the combined company would have owned stations in almost 3 out of 4 USA households, controlling an enormous amount of the content Americans see on local stations.

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