Tribune Media scraps Sinclair deal

Tribune Broadcasting Los Angeles affiliate KTLA 5 is seen in Hollywood Los Angeles

PWInsider reports that Tribune Media has terminated its purchase agreement with Sinclair Broadcast Group and have filed a lawsuit against Sinclair for breach of contract.

The backstory: The deal was thought to be a sure thing, but the FCC threw a wrench into it after Chairman Ajit Pai, who is favorable to industry consolidation, raised questions about the validity of some of the deal terms provided to the commission by Sinclair.

Sinclair, which owns 192 stations, said in May 2017 that it planned to acquire Chicago-based Tribune´s 42 TV stations in 33 markets in a deal that would significantly expand its reach.

The FCC reportedly concluded that Sinclair may have misrepresented or omitted some facts in its applications in an attempt to get around the FCC's ownership rules.

As for Tribune's lawsuit, Ripley said Sinclair "fully complied with our obligations under the merger agreement and tirelessly worked to close this transaction".

As of Thursday morning, Sinclair hadn't released a statement about the failed merger. By one estimate, the combined company would have owned stations in almost 3 out of 4 USA households, controlling an enormous amount of the content Americans see on local stations.

Additional reporting from Newsy affiliate CNN.

"Tribune made clear that Sinclair's decision to push the envelope as to what regulators might permit when those regulators had clearly and repeatedly indicated opposition, was irreconcilable", the suit states. The FCC in July referred the merger to an administrative judge hearing, often a death knell for these types of deals.




Tribune Media is the parent company of WREG News Channel 3 in Memphis.

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

"In light of (the FCC order), this transaction can not be completed within an acceptable time frame, if ever", Kern said.

Tribune's move to kill the merger comes three weeks after the Federal Communications Commission voted unanimously against approving Sinclair's proposed acquisition of Tribune Media. "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".

Sinclair has defended the decision to have its anchors read from the same script across the country as a way to distinguish its news shows from unreliable stories on social media.

After that, the Justice Department started an investigation about whether talks between advertising teams at TV Station groups violated antitrust laws.

Those transactions involved selling highly valuable stations to buyers with business ties to Sinclair for below-market prices, the FCC alleged. Sinclair would have stations in Philadelphia, Washington, DC, Virginia, Indianapolis, Seattle, Sacramento, Milwaukee, Kansas City, Des Moines, Denver, Dallas, Houston, New Orleans, Memphis, Miami, Greensboro, Richmond, Des Moines, San Diego, Salt Lake City, Oklahoma City, St. Louis and more. And the sales allegedly had strings attached that would allow Sinclair to retain significant control over the stations' operations and programming.

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