Tribune Breaks Off $3.9B Sinclair Merger, Sues Sinclair

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Tribune withdrew Thursday from its $3.9 billion buyout by Sinclair and it's filing a lawsuit against it, citing breach of contract.

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.

Sinclair wanted to purchase Tribune Media's 42 stations in 33 markets, but there was a problem.

Reporters at stations owned by Sinclair - which include almost 200 local affiliate news channels across the country branded as ABC, CBS, NBC, Fox, and more - have been forced to run segments that attack Democratic politicians, discredit the FBI's investigation of Russian Federation, call other media outlets "false news", and even run a regular commentary show by a former Trump adviser. Meanwhile, it has seen some employees leave.

'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, ' the company said.

The blistering complaint continues, "Sinclair repeatedly favored its own financial interests over its contractual obligations by rejecting clear paths to regulatory approval".

The FCC voted last month to refer the proposed merger to an administrative law judge to review questions about Sinclair's candor, a move that analysts had then said would likely lead to the deal's collapse.

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Sinclair did not immediately respond to requests for comment.

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. Sinclair has been scrutinized for its ties to the Trump administration. The so-called sidecar agreement would have kept Sinclair essentially in charge of the Chicago station, with an option to buy it back for the same price within eight years.

"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", Peter Kern, Tribune Media's chief executive officer, said in the statement. "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".

The FCC said Sinclair did not "fully disclose facts" about the planned sale of three stations, including pre-existing business relationships between the company and prospective buyers.

The deal began to come under heavy FCC scrutiny in July. But the road ahead remains uncertain for Tribune Media.

The American Cable Association (ACA), which represents small- and medium-sized cable companies, also cheered Tribune's decision.

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