Tribune Media Cancels Sinclair Media's Purchase and Files Lawsuit


Sinclair already has 173 stations around the country, including KENV in Salt Lake City, KOMO in Seattle and WKRC in Cincinnati.

'In light of the FCC's unanimous decision, referring the issue of Sinclair's conduct for a hearing before an administrative law judge, our merger can not be completed within an acceptable time frame, if ever, ' said Tribune Media Chief Executive Officer Peter Kern.

In May 2017, Sinclair proposed purchasing Tribune Media's 42 local TV stations and WGN America cable outlet, saying it would create a colossal TV station company owning, operating or providing services to 233 stations in 108 markets across the U.S. Nonetheless, the acquisition has been in limbo since then, awaiting regulatory approval from the Federal Communications Commission, which oversees the U.S. broadcast industry.

Subsequently, the FCC voted to subject Sinclair's divesture plan to a hearing before an administrative law judge, further delaying completion of the transaction. "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".

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.

The breakup of the deal is a stinging defeat for Sinclair, owner of dozens of local television stations.

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The deal's termination, which scuppers Sinclair's efforts to dramatically expand, comes after criticism by Democrats and public advocacy groups over whether the merger was in the public interest. Tribune is seeking an amount "including but not limited to approximately $1 billion of lost premium to Tribune's stockholders and additional damages in an amount to be proven at trial".

The Maryland company did not immediately respond early Thursday to a request for comment from The Associated Press. Sinclair agreed to sell off a number of stations to comply with the FCC's national ownership cap, which prohibits a single entity from reaching more than 39 percent of TV households.

Tribune Media is a parent company of WGN-TV. "Accordingly, we have exercised our right to terminate the Merger Agreement, and, by way of our lawsuit, intend to hold Sinclair accountable", said Tribune CEO Peter Kern in the release.

If no divestitures were made, "the combined company would reach 72 percent of U.S. television households and would own and operate the largest number of broadcast television stations of any station group", the FCC notes.

The FCC's concerns followed similar questions raised in separate filings by the American Civil Liberties Union and conservative news outlet Newsmax Media.