Tag, You’re It: Sinclair Countersues Tribune
• Earlier this month, Tribune Media withdrew from its proposed merger with Sinclair Broadcast Group, while announcing a $1 billion lawsuit against Sinclair alleging breach of contact after its failed negotiations with federal regulators over the deal. Yesterday, Sinclair returned the favor and filed a countersuit against Tribune. As the Los Angeles Times reports, the counterclaim maintains that Sinclair “pushed hard” to secure regulatory approval for the proposed tie-up and called Tribune’s subsequent attempt to distance itself from Sinclair “self-serving.” Sinclair is asking a Delaware court to find that Tribune was the one that broke the terms of the merger agreement.
Tribune’s suit alleges that Sinclair’s dealings with regulators charged with reviewing the deal were marked by “belligerent and unnecessarily protracted negotiations.” Tribune is seeking damages of $1 billion in that suit. As Variety reports, “Sinclair’s 182-page response and counterclaim maintains that Sinclair never guaranteed Tribune in the merger agreement that the deal would receive regulatory approval.” In a statement, Sinclair Chief Executive Chris Ripleysaid, “Tribune, through its meritless lawsuit, is seeking to capitalize on an unfavorable and unexpected reaction from the Federal Communications Commission to capture a windfall for Tribune.”
Sinclair had sought to buy Tribune’s 42 television stations in a $3.9-billion deal, which fell apart last month after the FCC voted to subject the proposal to further legal review after Chairman Ajit Pairaised “serious concerns.” Pai said that certain stations Sinclair had proposed selling off as a condition of the deal risked staying within Sinclair’s effective control, which could violate federal regulations. There were other concerns that Sinclair may have been less than transparent with the agency over its divestiture plans, Pai said at the time. Sinclair called Pai’s decision to refer the deal to a hearing before a judge “stunning and wholly unexpected.”
Although Sinclair insisted that it had fully complied with regulators, the FCC’s decision to send the merger to an administrative law judge became a turning point for the deal. On Aug. 8, Tribune withdrew from the plan and sued Sinclair. And how was your week?
