Tribune backs out of Sinclair merger

Angelo Anderson
August 9, 2018

It also follows a significant blow from the Republican-led Federal Communications Commission last month, when it questioned Sinclair's candor over the planned sale of some stations.

Tribune filed the lawsuit against Sinclair, the largest USA broadcast station owner, alleging material breach of contract over its failure to win over regulators 15 months after the merger was first announced.

Tribune pointed to the same problems that the FCC found in Sinclair's proposal to divest some stations in order to stay under federal ownership limits.

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

Tribune, which is on the hook for a $135million breakup fee, filed a lawsuit against Sinclair, the largest United States broadcast station owner, alleging material breach of contract 15 months after the merger was first announced.

In the merger agreement, Sinclair committed to use its reasonable best efforts to obtain regulatory approval as promptly as possible, including agreeing in advance to divest stations in certain markets as necessary or advisable for regulatory approval. By one estimate, the combined company would have owned stations in almost 3 out of 4 US households, controlling an enormous amount of the content Americans see on local stations.

Analysts expect Tribune to seek another buyer.

The Maryland company said Thursday in a prepared statement that the Tribune lawsuit is "entirely without merit".


According to Axios, Tribune is also filing a lawsuit against Sinclair, alleging breach of contract.

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

In a bid to reassure regulators, Sinclair said it was willing to relinquish 23 stations but the FCC accused the local new giant of trying to retain control of several of them, and cited a lack of transparency in its plans.

The two companies had until midnight Wednesday to call off their deal. Here, the WGN Radio sign appears on the side of Tribune Tower in downtown Chicago.

The so-called "sidecar deals" unraveled the merger's chances of approval, Tribune said, and ultimately prompted its decision to back out and file a lawsuit.

The announcement brings an end to a merger that was thought to have a staunch champion in FCC Chairman Ajit Pai, whose tenure had been marked by a deregulatory agenda that had cleared out restrictions against consolidation in the media industry.

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".

Other reports by Iphone Fresh

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