Published: Thu, August 09, 2018

Tribune Media kills $3.9B merger with Sinclair after FCC's 'serious concerns'

Tribune Media kills $3.9B merger with Sinclair after FCC's 'serious concerns'

Sinclair Broadcast Group, Department of Justice and FCC didn't immediately respond to requests for comment.

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

"Our merger can not be completed within an acceptable timeframe, if ever", said Tribune CEO Peter Kern in a statement.

Last month, FCC Chairman Ajit Pai expressed "serious concerns" regarding this merger, which would have created one of the largest broadcasting companies in the country and further consolidated the power of Sinclair, which owns almost 200 local stations throughout the US.

Tribune Media would be on the hook for a $135 million breakup fee, according to the agreement reached past year.

As a result, Sinclair planned to sell off 21 of its stations.

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.

In the lawsuit filing (via CNN), Tribune alleges that Sinclair "repeatedly and willfully breached its contractual obligations in spectacular fashion".

Sinclair owns or operates 173 broadcast TV stations in 81 markets, while Tribune has 42 stations in 33 markets.

'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, ' the company said.

The complaint seeks $1 billion from Sinclair to cover the "lost premium to Tribune's stockholders", plus "additional damages in an amount to be proven at trial".

In a surprise move in July, however, Pai said he had "serious concerns" and suggested Sinclair was trying to hide anticompetitive practices in its proposed purchase and divestiture of certain stations.

The Maryland company said Thursday in a prepared statement that the Tribune lawsuit is "entirely without merit". In Los Angeles, they own KTLA channel 5 and in Chicago, they own WGN TV. 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.

Under the terms of the deal, Tribune and Sinclair had the right to call off the deal without paying a termination fee if it was not completed by August 8.

FCC Chairman in July expressed "serious concerns" over the deal, saying Sinclair would still control the stations it divested in practice.

Sinclair operates 192 stations, runs 611 channels and operates in 89 USA markets. It could have had a new show on WGN America or had an existing show moved there.

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