Tribune Pulls Out, Sues Sinclair

• Tribune Media today announced it would withdraw from its proposed merger with Sinclair Broadcast Group, while also announcing a $1 billion lawsuit against Sinclair over its failed negotiations with federal regulators over the deal.

The Washington Post reports the deal’s implosion “reflects a reversal of fortunes” for Sinclair, which had announced the $3.9 billion deal last year as a “transformational” event, with the goal of creating a conservative broadcasting giant, with Sinclair controlling 233 stations in 108 markets. The original deal would have meant creating the biggest U.S. television company, adding Tribune’s 42 stations to Sinclair’s roster.

But the merger began to stumble last month after FCC Chairman Ajit Pai waded into the situation, raising “serious concerns” about the deal, which originally would have reached roughly 70 percent of U.S. households. The FCC said it would send the deal for review by an administrative law judge, which is often interpreted as a signal a transaction may be blocked.

In a statement, Tribune CEO Peter Kern said, “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 cannot be completed within an acceptable time frame, if ever. This uncertainty and delay would be detrimental to our company and our shareholders. Accordingly, we have exercised our right to terminate the Merger Agreement, and, by way of our lawsuit, intend to hold Sinclair accountable.”