Published: Fri, August 10, 2018
Life&Culture | By Rose Hansen

Tribune backs out of $3.9 billion buyout by Sinclair

Tribune backs out of $3.9 billion buyout by Sinclair

The company was admonished by media watchdogs in April after dozens of Sinclair news anchors read an identical script expressing concern about "one-sided news stories plaguing the country".

Tribune Media on Thursday pulled out of a deal to acquire Sinclair Broadcast Group, and is suing for breach of contract, after the group came under scrutiny from US regulators.

Tribune Media is suing Sinclair Broadcast Group over the way it handled divesting TV stations ahead of their planned merger.

Tribune also said Sinclair refused to sell stations in the markets as required to obtain approval, and proposed aggressive divestment structures and related-party sales that were either rejected outright or posed a high risk of rejection and delay. "Further delay and uncertainly would be detrimental to our company, our business partners and our shareholders, and accordingly, our board made a decision to terminate the merger agreement with Sinclair".

"In the Merger Agreement, Sinclair committed to use its reasonable best efforts to obtain regulatory approval as promptly as possible, including agreeing in advance to divest stations in certain markets as necessary or advisable for regulatory approval", Tribune said in its announcement.

To stay under the national TV ownership cap, Sinclair had proposed shedding 23 stations, including 14 owned by Tribune and nine of its own.

Public Knowledge, an advocacy group that has been critical of the FCC under Pai, has been against a tie up between Sinclair and Tribune from the start.

According to Axios, Tribune is also filing a lawsuit against Sinclair, alleging breach of contract.

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Sinclair has become a significant outlet for conservative perspectives.

On Thursday, Kern said the FCC order, which has been the death knell for previous media mergers, was the final straw for Tribune Media.

Wednesday was the first day Tribune was allowed to pull out of the deal, per the merger agreement.

Nexstar Media Group (NXST.O) and Twenty-First Century Fox Inc (FOXA.O), partnering with private equity, had considering buying Tribune before Sinclair announced its deal and are likely bidders, analysts have said.

Tribune employees were notified that the deal was off in a lengthy early-morning memo from Kern that blasted Sinclair and said Tribune had done "everything it was supposed to do".

The Maryland company said Thursday in a prepared statement that the Tribune lawsuit is "entirely without merit". "Accordingly, we have exercised our right to terminate the Merger Agreement, and, by way of our lawsuit, intend to hold Sinclair accountable".

A survey by the Washington Post in December 2016 showed that the coverage by Sinclair-run news outlets was "disproportionately" favorable to Trump in the election year.

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