Tribune Kills Its Merger With Sinclair, Sues the Broadcast Giant for Breach of Contract

America's largest owner of local TV stations may try to make a deal with a different company

The deal would have given Sinclair access to more than 70 percent of U.S. TV-owning households. Getty Images
Headshot of A.J. Katz

Tribune Media has officially terminated its $3.9 billion agreement with Sinclair Broadcast Group, the company announced this morning.

This comes after roughly 15 months of Sinclair revising its local station divestiture plan in an effort to appease the federal government’s long-standing concerns. But Tribune finally took matters into its own hands and walked away.

In addition to Tribune officially terminating the merger, the company has sued Sinclair for breach of contract. Tribune filed a lawsuit against Sinclair alleging the broadcast titan “engaged in unnecessarily aggressive and protracted negotiations with the Department of Justice and the FCC over regulatory requirements.”

The Sinclair-Tribune deal was struck in May 2017 and would have given Sinclair—already the largest owner of local stations in the country—ownership of 233 local TV stations across the nation, including 42 Tribune stations, and access to more than 70 percent of U.S. TV-owning households.

Tribune will now most likely sell its stations to another local broadcast group, with Sinclair and its conservative-skewing news operation very likely to try and make a different deal to acquire different local TV stations.

The merger had been expected to get the green light from the Department of Justice since the agreement was announced. But that seemed to change when Federal Communications Commission chairman Ajit Pai said in a statement earlier this month that he had “serious concerns” about Sinclair’s plan to divest certain local stations to companies with which it has ties, specifically ties to Sinclair chairman David Smith.

“Based on a thorough review of the record, I have serious concerns about the Sinclair-Tribune transaction,” Pai said. “The evidence we’ve received suggests that certain station divestitures that have been proposed to the FCC would allow Sinclair to control those stations in practice, even if not in name, in violation of the law.”

President Donald Trump recently grew frustrated with Pai’s decisions, as well as the strong possibility that the merger would fall apart, expressing a desire to see conservative viewpoints better represented in the American media landscape.

Sinclair’s news operation has come under fire in 2018 after the company released a promo in April showing dozens of anchors at many of Sinclair’s stations across the country reading the exact same script.

In the promo, the local anchors call out “one-sided news stories” and accuse “some media outlets” of publishing “fake stories without checking facts first.” The script echos Trump’s chief complaints of media outlets he doesn’t like.

The irony of it all is that Sinclair was seemingly empowered to pursue the merger with Tribune in the first place because Trump’s FCC under Pai’s leadership made the decision to roll back longtime broadcast TV station ownership rules last year.

@ajkatztv A.J. Katz is the senior editor of Adweek's TVNewser.
Publish date: August 9, 2018 © 2020 Adweek, LLC. - All Rights Reserved and NOT FOR REPRINT