Tribune Calls Off $3.9 Billion Sale To Sinclair

Tribune Calls Off $3.9 Billion Sale To Sinclair

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

Tribune Media Co. said Thursday that it is suing Sinclair for breach of contract and at least $1 billion in damages, according to its complaint.

Tribune seeks compensation for all losses incurred as a result of Sinclair's material breaches of the merger agreement.

To stay under the national TV ownership cap, Sinclair had proposed shedding 23 stations, including 14 owned by Tribune and nine of its own.

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.

As of today, the highly anticipated Sinclair and Tribune TV merger is dead. "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".

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But constructing deals in such a way that would allow the company to maintain control or re-purchase them wasn't what Tribune had in mind.

The deal, as originally announced in May 2017, would give Sinclair control of 233 TV stations, including 42 Tribune-owned stations and a presence in such top markets as NY and Chicago. The FCC in July referred the merger to an administrative judge hearing, and called into question whether some of Sinclair's proposed divestments were a "sham".

"In light of (the FCC order), this transaction can not be completed within an acceptable time frame, if ever", Kern said. By one estimate, the combined company would have owned stations in almost 3 out of 4 US households, controlling an enormous amount of the content Americans see on local stations. "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". Odds may have seemed to favor Sinclair partly because of the broadcaster's conservative leanings and Sinclair Chairman David Smith's meetings with President Donald Trump. "This deal would have contributed to the trend where "local" news and "local" programming is created or scripted out of town".

"While what has apparently killed this deal was Sinclair's pattern of deception at the FCC - a fact that should affect its future dealings at the Commission - the deal was bad on its own merits, and this latest development is good for consumers", said Phillip Berenbroick, senior policy counsel at the organization.

"Tribune's decision to pull the plug on the Sinclair merger is great news for consumers who will avoid paying the higher pay-TV rates the deal would have caused", ACA CEO Matthew Polka said.

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