Tribune Media terminates deal to be bought by Sinclair

Calvin Saunders
August 10, 2018

Tribune Media has officially terminated its planned merger with Sinclair Broadcast Group, Inc. and said it will also be suing the company for breach of contract.

The $3.9 billion deal would have given Sinclair control of more than 200 local television stations broadcasting to 72 percent of the USA population, and the announcement of the proposed merger in May 2017 raised concerns about Sinclair's market dominance.

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. On Thursday, Kern said that any further delays would hurt his company - so the Tribune board made a decision to spike the deal.

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

Tribune Media is a parent company of WGN-TV.

The headquarters of the Sinclair Broadcast Group is shown April 3, 2018 in Hunt Valley, Maryland.

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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. And the sales allegedly had strings attached that would allow Sinclair to retain significant control over the stations' operations and programming.

The Federal Communications Commission (FCC) was initially seen as favoring the union, which had the blessing of the Trump administration. The FCC declined to comment on Thursday. Here, the WGN Radio sign appears on the side of Tribune Tower in downtown Chicago.

Tribune employees were notified that the deal was off in a lengthy early-morning memo from Kern that blasted Sinclair and said Tribune had done "everything it was supposed to do".

It's already been more than a year after the merger was announced; the two companies had previously said they would close the deal by the end of 2017. 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. "Accordingly, we have exercised our right to terminate the Merger Agreement, and, by way of our lawsuit, intend to hold Sinclair accountable".

Had the merger with Tribune Media been approved, Sinclair would have completely dominated the local news market.

Other reports by MaliBehiribAe

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