Tribune Media said Thursday that it would withdraw from its proposed merger with Sinclair Broadcast Group, while announcing a $1 billion lawsuit against Sinclair over its failed negotiations with federal regulators over the deal.
The breakdown of the deal reflects a reversal of fortunes for Sinclair, which had announced the $3.9 billion tie-up last year as a “transformational” event and the biggest acquisition in its history.
But the merger began to stumble last month after Federal Communications Commission Chairman Ajit Pai raised “serious concerns” about the deal, which originally would have reached roughly 70 percent of U.S. households. The FCC said it would send the deal for review by an administrative law judge, which is often interpreted as a signal a transaction may be blocked.
“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 cannot be completed within an acceptable time frame, if ever,” said Peter Kern, Tribune’s chief executive officer, in a statement Thursday. “This uncertainty and delay would be detrimental to our company and our shareholders. Accordingly, we have exercised our right to terminate the Merger Agreement, and, by way of our lawsuit, intend to hold Sinclair accountable. ”
Sinclair did not immediately respond to a request for comment.
The $3.9 billion deal had aimed to create a conservative broadcasting giant, with Sinclair proposing to control 233 stations in 108 markets nationwide. The original deal would have meant creating the biggest U.S. television company, adding Tribune’s 42 stations to Sinclair’s roster. And it would have been a victory for conservative media in a turbulent political environment, in which Republican critics have alleged systemic negative bias on college campuses and social media platforms.
The merger has even attracted the attention of President Trump, who last month on Twitter criticized federal regulators for getting in the way of what he said would have become a “great and much needed Conservative voice for and of the People. ”
– Washington Post