Tribune pulls plug on $3.9B buyout by Sinclair

Tribune pulls plug on $3.9B buyout by Sinclair

The failure of the proposed $3.9 billion merger ends a lengthy saga that generated widespread opposition over Sinclair's right-leaning editorial views and concerns about media concentration.

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

Separately, on Tuesday, Democratic members of Congress asked the FCC to investigate reports that "Sinclair Broadcasting illegally exercised control over the advertising activities of Tribune Media Company". Meanwhile, it has seen some employees leave.

"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. It announced plans past year to merge with Chicago-based Tribune, a deal that would have given Sinclair access to 72 percent of American households.

Sinclair operates 192 stations, runs 611 channels and operates in 89 US markets. 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.

Last month, Pai said the merger would need to be reviewed by a judge in an administrative hearing - a huge setback for a deal that was announced in May of 2017. 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.

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The FCC did not immediately comment on Thursday.

"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 timeframe, if ever", Tribune Media CEO Peter Kern said in the statement. On Thursday, Kern said that any further delays would hurt his company - so the Tribune board chose to spike the deal.

The Tribune Group on Thursday accused Sinclair of acting in bad faith and adopting an "unnecessarily aggressive" attitude toward regulators, and said it was taking Sinclair to court for breaching the agreement.

"Sinclair repeatedly favored its own financial interests over its contractual obligations by rejecting clear paths to regulatory approval", the lawsuit alleges. And the sales allegedly had strings attached that would allow Sinclair to retain significant control over the stations' operations and programming. The lawsuit seeks compensation for all losses incurred as a result of Sinclair's material breaches of the Merger Agreement.

Tribune (TRCO) had been expected to walk away after the deal came under scrutiny from USA regulators.

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