Sinclair-Tribune Deal Dead

Tribune Media has filed a lawsuit against Sinclair Broadcast Group and bailed out of the long-pending sale agreement in the face of opposition from the FCC and questions about whether Sinclair tried to mislead the government with its divestiture plan, according to Variety.

Tribune cited Sinclair’s “unnecessarily aggressive and protracted negotiations with the Department of Justice and the Federal Communications Commission” in the regulatory review of the merger as the reason for the suit, filed Thursday in Delaware Chancery Court.

Gerry Kern

“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 cannot be completed within an acceptable timeframe, if ever,” said Peter Kern, Tribune Media CEO. “This uncertainty and delay would be detrimental to our company and our shareholders. Accordingly, we have exercised our right to terminate the Merger Agreement, and, by way of our lawsuit, intend to hold Sinclair accountable.”

The $3.9 billion transaction would have combined two of the country’s largest broadcasters into a giant with more than 200 stations. Public interest groups lined up against the merger and Democrats contended that Sinclair was trying to infuse local stations with a conservative bent.

he decision to abandon the merger immediately raises the prospect of other suitors for Tribune Media. Industry sources speculate that the company may wind up selling off its assets in piecemeal fashion. Fox Television Stations had already cut a deal with Sinclair to acquire 7 of Tribune’s Fox affiliate stations for $910 million as part of its divestiture plan.

The deal-breaker on the merger came last month, when FCC chairman Ajit Pai announced that he had “serious concerns” about the transaction. The commissioners voted unanimously to send the merger to an administrative law judge for a hearing, a prospect that likely would add months or a year or longer to the review.