Tribune Media withdraws from $3.9B buyout by Sinclair, files lawsuit

Trump angry with FCC chair over Sinclair deal

Trump angry with FCC chair over Sinclair deal

Sinclair already own 39% of the TV stations in the United States, and this would have raised that to 42%.

In the lawsuit filing (via CNN), Tribune alleges that Sinclair "repeatedly and willfully breached its contractual obligations in spectacular fashion".

Tribune seeks about $1 billion of lost premium to Tribune's stockholders and additional damages in an amount to be proven at trial, according to a copy of the lawsuit filed in Delaware. The reason Tribune has filed suit is that Sinclair agreed to use "best reasonable efforts" to make the sale happen by pursuing the sell off of some of its own stations.

The deal was worth $3.9 billion for Tribune Media and would have added more than 40 stations including KTLA in Los Angeles, WPIX in NY and WGN-TV in Chicago to Sinclairs list of local affiliates.

The turnabout has ruined plans by the Smith family that controls Sinclair to buy more than 30 more TV stations from Chicago-based Tribune Media, to add to its current roster of more than 190 stations.

The FCC said in July Sinclair "did not fully disclose" facts about the merger, raising questions about whether the company had "attempted to skirt the commission's broadcast ownership rules" and would, in fact, actually control the stations Sinclair said it was divesting.

There was still a slim chance that Sinclair could save the merger because the FCC referred the deal to an administrative law judge.

The company is "open to all opportunities" in terms of industry consolidation or remaining independent, Tribune Media Chief Executive Officer Peter Kern told investors on a call on Thursday.

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Tribune has been considering its options since the Federal Communications Commission voted last month to send Sinclair's application to a review by an administrative law judge, a move that typically signals the end of such mergers.

Under the terms of the deal, Tribune and Sinclair had the right to call off the merger without paying a termination fee if it was not completed by August 8.

In a surprise move in July, however, Pai said he had "serious concerns" and suggested Sinclair was trying to hide anticompetitive practices in its proposed purchase and divestiture of certain stations.

"Our merger can not be completed within an acceptable timeframe, if ever", said Tribune CEO Peter Kern in a statement. President Donald Trump tweeted his support of the company at the time.

Free media advocacy groups cheered the demise of the deal.

"This deal would have contributed to the trend where "local" news and "local" programming is created or scripted out of town and is indistinguishable from cable news", Public Knowledge Senior Policy Counsel Phillip Berenbroick said today.

With the Tribune merger dead for good, Sinclair will look for other ways to acquire new stations. "But we expect more efforts from the media titans in the future to tighten their grip on the information marketplace". "Broadcasters are supposed to serve their local communities".

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