Tribune Breaks Off $3.9B Sinclair Merger, Sues Sinclair

Sinclair Broadcast Group’s headquaters in Hunt Valley Md

Sinclair Broadcast Group’s headquaters in Hunt Valley Md

Sinclair CEO Chris Ripley said Wednesday that Sinclair was working with Tribune to save the merger.

The media company, which has enjoyed the support of President Donald Trump, appeared to be cruising toward approval by US regulators.

The FCC vote means that the "merger can not be completed within an acceptable timeframe, if ever", Tribune CEO Peter Kern said. "Millions of people spoke out against this deal, and that public pressure was instrumental in keeping the spotlight on Sinclair".

"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.

Last month, however, Federal Communications Commission Chairman Ajit Pai said that he had "serious concerns" about the deal, saying that Sinclair might still be able to operate the stations "in practice, even if not in name".

Sinclair, a Maryland-based company which is the largest owner of local news stations in the USA, is notorious for its right-wing, pro-Trump slant, and its unusual system of distributing slanted "must-run" content to its local stations to work into their broadcasts. If no divestitures were made, "the combined company would reach 72 percent of USA television households and would own and operate the largest number of broadcast television stations of any station group", the FCC notes.




The deal, as originally announced in May 2017, would give Sinclair control of 233 TV stations, including 42 Tribune-owned stations and a presence in such top markets as NY and Chicago. The so-called sidecar agreement would have kept Sinclair essentially in charge of the Chicago station, with an option to buy it back for the same price within eight years.

In the lawsuit filed Thursday in Delaware Chancery Court, Tribune Media alleges Sinclair breached its contractual obligations "in spectacular fashion" in a bid to maintain control of WGN-TV and other stations. The FCC declined to comment on Thursday.

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

Tribune general counsel, Eddie Lazarus, told analysts on the same call the company was seeking a "large number" in damages from Sinclair.

Sinclair has defended the decision to have its anchors read from the same script across the country as a way to distinguish its news shows from unreliable stories on social media. "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 FCC's concerns followed similar questions raised in separate filings by the American Civil Liberties Union and conservative news outlet Newsmax Media.

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