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US: Tribune ends US$3.9b takeover, sues Sinclair

 |  August 9, 2018

Tribune Media announced Thursday, August 9, that it would terminate its proposed merger with Sinclair Broadcast Group, while announcing a US$1 billion lawsuit against the conservative television giant on grounds that it engaged in “misconduct” and precluded the US government from approving the deal.

In the lawsuit, Tribune accused Sinclair of engaging in “belligerent and unnecessarily protracted negotiations” with the Federal Communications Commission (FCC) as well as the Justice Department (DOJ), which had reviewed the merger for its effects on competition. By failing to divest television stations as regulators recommended, Tribune claimed Sinclair had “breached” the companies’ merger agreement, which required them to make their best efforts to secure federal approval.

Lobby groups, such as the American Civil Liberties Union, slammed the merger, arguing it would “virtually guarantee less viewpoint diversity in local news.” Sinclair, seeking to assuage regulator’s concerns, agreed to sell nearly two dozen television stations this year. But the FCC questioned whether these sales were “sham transactions.”

Peter Kern, Tribune Media’s chief executive, said on Thursday that “our merger cannot be completed within an acceptable timeframe, if ever… This uncertainty and delay would be detrimental to our company and our shareholders,” he continued. “Accordingly, we have exercised our right to terminate the merger agreement, and, by way of our lawsuit, intend to hold Sinclair accountable.”

Full Content: Financial Times

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