Tribune backs out of $3.9 billion buyout by Sinclair
- by Gwen Vasquez
- in Life&Culture
- — Aug 9, 2018
The lawsuit seeks compensation for all losses Tribune Media incurred during the attempted transaction. Sinclair already own 39% of the TV stations in the United States, and this would have raised that to 42%.
"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", Tribune CEO Peter Kern said in a statement. The company, the largest owner of local television stations in the United States, has drawn attention recently for repeating claims by U.S President Donald Trump that traditional television and print publications offer "fake" or biased news.
In the lawsuit filing (via CNN), Tribune alleges that Sinclair "repeatedly and willfully breached its contractual obligations in spectacular fashion". By one estimate, the combined company would have owned stations in almost 3 out of 4 USA households, controlling an enormous amount of the content Americans see on local stations. Tribune is seeking an amount "including but not limited to approximately $1 billion of lost premium to Tribune's stockholders and additional damages in an amount to be proven at trial".
The FCC voted last month to refer the proposed merger to an administrative law judge to review questions about Sinclair's candor, a move that analysts had then said would likely lead to the deal's collapse.
In a bid to reassure regulators, Sinclair said it was willing to relinquish 23 stations but the FCC accused the local new giant of trying to retain control of several of them, and cited a lack of transparency in its plans.
The Maryland company did not immediately respond early Thursday to a request for comment from The Associated Press.
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Ted Rouse, a Chicago-based partner with Bain & Company specializing in mergers and acquisitions, said it may be hard for Tribune Media to return to business as usual after 15 months in limbo.
Mike Huckabee, (R-Ark.), and FBN's Maria Bartiromo and Kristina Partsinevelos on Tribune Media terminating its merger agreement with Sinclair Broadcast Group.
Last month, however, FCC Chairman Ajit Pai said that he had "serious concerns" about the deal, saying that Sinclair might still be able to operate the stations "in practice, even if not in name".
The company is "open to all opportunities" in terms of industry consolidation or remaining independent, Tribune Media Chief Executive Officer Peter Kern told investors on a call on Thursday.
A dozen Senate Democrats said in April Sinclair was deliberately distorting news coverage by forcing local stations to read scripts that criticized what it described as "the troubling trend of irresponsible, one-sided news stories plaguing our country".
