Tribune Media scraps Sinclair deal

Tribune Media terminates deal to be bought by Sinclair

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Tribune "warned Sinclair repeatedly over many months" that its refusal to comply with required station divestitures was a breach of contract, according to the lawsuit, which seeks to recover at least $1 billion in damages.

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 timeframe, if ever", said Tribune Media CEO Peter Kern, in a statement.

Sinclair Broadcast Group Inc. wanted the Chicago company's 42 TV stations and had agreed to dump nearly two dozen of its own to score approval by the Federal Communications Commission.

Tribune withdrew from its $3.9 billion buyout by Sinclair, ending a bid to create a massive media juggernaut that could have rivaled the reach of Fox News.

The FCC said Sinclair did not "fully disclose facts" about the planned sale of three stations, including pre-existing business relationships between the company and prospective buyers. Sinclair also refused to sell certain stations that would have helped the deal secure regulatory approval, Tribune claimed in a news release.

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. Its portfolio of 42 local TV stations as well as assets such as the WGN America cable network, were viewed as attractive and will likely remain so given the company's consistent financial performance of late.

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The so-called "sidecar deals" unraveled the merger's chances of approval, Tribune said, and ultimately prompted its decision to back out and file a lawsuit. The Tribune deal, plus other pending acquisitions, will give Sinclair a total of 233 TV stations.

'So sad and unfair that the FCC wouldn't approve the Sinclair Broadcast merger with Tribune.

By filing a lawsuit against Sinclair, Kern said, Tribune intends to "hold Sinclair accountable".

Sinclair did not immediately comment on Thursday, but said last month "at no time have we withheld information or misled the FCC in any manner whatsoever".

The company is "open to all opportunities" in terms of industry consolidation or remaining independent, Tribune Media Chief Executive Officer Peter Kern told investors on a call on Thursday.

FCC Chairman in July expressed "serious concerns" over the deal, saying Sinclair would still control the stations it divested in practice. Sinclair defended the script as a way to distinguish its news shows from unreliable stories on social media.

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