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Tribune Media terminates $3.9 billion merger with Sinclair

Tribune Media terminates $3.9 billion merger with Sinclair

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. But Tribune announced today "that it has filed a lawsuit in the Delaware Chancery Court against Sinclair for breach of contract".

Tribune filed the lawsuit against Sinclair, the largest USA broadcast station owner, alleging material breach of contract over its failure to win over regulators 15 months after the merger was first announced.

Tribune Media has no further comment. But the FCC had issues with the way Sinclair was approaching these sales and was concerned the company could buy the stations back after the merger was complete.

There was still a slim chance that Sinclair could save the merger because the FCC referred the deal to an administrative law judge.

By filing a lawsuit against Sinclair, Kern said, Tribune intends to "hold Sinclair accountable".

"Sinclair engaged in unnecessarily aggressive and protracted negotiation with the Department of Justice and the Federal Communications Commission".

"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", Tribune CEO Peter Kern said in a statement.

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.

The FCC raised questions after Sinclair had proposed to sell WGN to Maryland auto dealer Steven Fader, a longtime business associate of Sinclair Executive Chairman David Smith, as Sinclair would largely continue to operate the station under a services agreement.

To attempt to satisfy the FCC, Sinclair had said last month it would not divest WGN and would seek to put the two Texas stations into a divestiture trust to be sold and operated by an independent trustee.

At the time, President Donald Trump tweeted his support of the company.

The merger was opposed by Democratic lawmakers, consumer advocacy groups, small cable companies, and Sinclair competitors. "But we expect more efforts from the media titans in the future to tighten their grip on the information marketplace".

"We're obviously disappointed", Tribune CEO Peter Kern said on a conference call Thursday morning. "It is especially great news for those consumers served by smaller video providers that have been victimized in the past by outrageous retransmission consent fee hikes and scurrilous signal blackouts by large corporate broadcasters".

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