Tribune ends Sinclair merger bid and files suit over losses

Bessie Dean
August 10, 2018

Tribune Media Company today terminated its merger agreement with Sinclair Broadcast Group and sued Sinclair for breach of contract.

The company, the largest owner of local television stations in the United States, has drawn attention recently for repeating claims by U.S President Donald Trump that traditional television and print publications offer "fake" or biased news.

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. "Further delay and uncertainly would be detrimental to our company, our business partners and our shareholders, and accordingly, our board chose to terminate the merger agreement with Sinclair".

In its statement, Tribune said, "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".

Sinclair was to have acquired Tribune for a hefty $3.9 billion price tag - in a move that would have added dozens of local stations to the roughly 200 which are already in its portfolio.

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.

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Sinclair has become a significant outlet for conservative views. Here, the WGN Radio sign appears on the side of Tribune Tower in downtown Chicago.

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

Kern acknowledged that there would be "speculation" about who might buy Tribune, but urged employees to "shake off the cobwebs of deal distraction, ignore the outside noise, and continue delivering on our commitment to each other, to our customers, to our partners and to the communities we serve".

"We've done everything we could to assist Sinclair in getting through the regulatory process, and it's been a huge undertaking for our company to manage through this prolonged exercise, while also keeping our business running strong", Tribune Media CEO Peter Kern said during an earnings call Thursday morning.

Sinclair also had planned to sell stations in Dallas and Houston to Cunningham Broadcasting Corp, a company controlled by the estate of Smith's mother. Sinclair defended the script as a way to distinguish its news shows from unreliable stories on social media.

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