Tribune Media terminates deal to be bought by Sinclair

09 August, 2018, 17:35 | Author: Dominic Spencer
  • Tribune Media terminates merger agreement with Sinclair files lawsuit for breach of contract

Tribune Media has terminated its merger agreement with Sinclair Broadcast Group and has sued the right-leaning TV station owner - accusing it of failing to give its best effort to gain regulatory approval for the deal, Tribune said on Thursday.

Tribune Media on the hook for a $135 million breakup fee, according to the agreement reached a year ago.

The turnabout has ruined plans by the Smith family that controls Sinclair to buy more than 30 more TV stations from Chicago-based Tribune Media, to add to its current roster of more than 190 stations.

The announcement brings an end to a merger that was thought to have a staunch champion in FCC Chairman Ajit Pai, whose tenure had been marked by a deregulatory agenda that had cleared out restrictions against consolidation in the media industry. That would violate antitrust laws.

"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", said Tribune Media CEO Peter Kern, in a statement. On Thursday, Kern said that any further delays would hurt his company - so the Tribune board chose to spike the deal. But constructing deals in such a way that would allow the company to maintain control or re-purchase them wasn't what Tribune had in mind.

Sinclair, one of the nation's largest owners of TV stations, has become a significant outlet for conservative perspectives. It announced plans a year ago to merge with Chicago-based Tribune, a deal that would have given Sinclair access to 72 percent of American households.

The deal was worth $3.9 billion for Tribune Media and would have added more than 40 stations including KTLA in Los Angeles, WPIX in NY and WGN-TV in Chicago to Sinclairs list of local affiliates.

At the time, President Donald Trump tweeted his support of the company. The operator of the WGN America network posted revenue of $489.4 million in the period, also beating expectations.



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