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Tribune calls off $3.9 billion buyout by Sinclair, files suit

Tribune calls off $3.9 billion buyout by Sinclair, files suit

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 USA, with 233 stations.

The Chicago-based broadcaster also said it filed a suit against Sinclair, headquartered in Hunt Valley, for breach of contract.

The complaint seeks $1 billion from Sinclair to cover the "lost premium to Tribune's stockholders", plus "additional damages in an amount to be proven at trial".

Tribune said it will sue Sinclair for breach of contract, arguing Sinclair's negotiations with the US Justice Department and FCC were "unnecessarily aggressive".

The Sinclair Broadcast Group deal to acquire KTLA's parent company Tribune Media is over.

Separately, on Tuesday, Democratic members of Congress asked the FCC to investigate reports that "Sinclair Broadcasting illegally exercised control over the advertising activities of Tribune Media Company".

As we previously reported, FCC Chairman Ajit Pai said he had "serious concerns" about the purchase, including that Sinclair would divest ownership of some stations but keep control of others. Last month, the FCC voted unanimously to subject the merger to an administrative law proceeding, a taxing and time-consuming process that was expected to kill 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.

Last month, FCC Chairman Ajit Pai expressed "serious concerns" regarding this merger, which would have created one of the largest broadcasting companies in the country and further consolidated the power of Sinclair, which owns almost 200 local stations throughout the US.

"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", Tribune said in the statement.

The Maryland company said Thursday in a prepared statement that the Tribune lawsuit is "entirely without merit".

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". 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".

Free media advocacy groups cheered the demise of the deal. "The American public and the American consumer do not need more media consolidation, and it's good that this deal is dead. This deal would have contributed to the trend where "local" news and "local" programming is created or scripted out of town".