Tribune Media Cancels Sinclair Media's Purchase and Files Lawsuit

Sinclair Broadcast Group’s headquaters in Hunt Valley Md

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 Company today terminated its merger agreement with Sinclair Broadcast Group and sued Sinclair for breach of contract.

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.

Last month, Cox Enterprises Inc COXET.UL said it was exploring strategic options for its 14 television properties, citing statements by Pai "that he intends to loosen rules around ownership of local TV stations".

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

The $1 billion lawsuit, filed in Delaware Thursday, said Sinclair knew it was taking a substantial risk by concealing from the FCC information about its relationships with certain buyers, putting undue pressure on the regulatory process and putting the merger at risk.

"We think that it is likely that another suitor will emerge for Tribune in the near-term", Kenneth Duffel, an analyst with KDP Investment Advisors, said in a note.

The failure of the proposed $3.9 billion merger ends a lengthy saga that generated widespread opposition over Sinclair's right-leaning editorial views and concerns about media concentration.

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Free media advocacy groups cheered the demise of the deal.

On Wednesday, Sinclair said it remained in discussions with Tribune about how to secure FCC approval of the deal, which has drawn wide-ranging criticism from across the political spectrum for how it would give the company access to so much of the nation's broadcast market.

Hunt Valley, Md. -based Sinclair agreed to buy Tribune Media's 42 TV stations in May 2017, creating what would be the largest ownership group in the US, with 233 stations.

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.

Kern said he would continue to run the company until Tribune reached a "permanent state".

Sinclair did not respond to a request for comment Thursday morning. 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. In addition, Tribune said, Sinclair outright refused to sell station in some markets.

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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