Tribune ends Sinclair merger bid and files suit over losses

Tribune ends Sinclair merger bid and files suit over losses

Not only is it pulling out of the deal, but Tribune is suing Sinclair, arguing Sinclair's negotiations with the US Justice Department and FCC were "unnecessarily aggressive". The lawsuit seeks compensation for all losses incurred as a result of Sinclair's material breaches of the Merger Agreement.

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 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 Peter Kern, Tribune Media's Chief Executive Officer.

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

Sinclair had proposed some revisions to its divesture plan last month, but those terms left Sinclair in control of stations under scrutiny, including in Chicago.

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.

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

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.

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Public Knowledge, an advocacy group that has been critical of the FCC under Pai, has been against a tie up between Sinclair and Tribune from the start.

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.

The Maryland company did not immediately respond early Thursday to a request for comment from The Associated Press.

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.

A dozen Senate Democrats said in April Sinclair was deliberately distorting news coverage by forcing local stations to read scripts that criticized what it described as "the troubling trend of irresponsible, one-sided news stories plaguing our country".

Ajit Pai, the Republican FCC chairman appointed by President Donald Trump, abruptly flagged "serious concerns" about the divestitures of stations by Sinclair and referred the case to an administrative law judge, effectively killing the deal.

The FCC's concerns followed similar questions raised in separate filings by the American Civil Liberties Union and conservative news outlet Newsmax Media.

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