Tribune Scuttles $3.8 Billion Merger With Sinclair, Sues for Breach of Contract
Tribune Media has pulled the plug on its merger agreement with the Sinclair Broadcast Group, a deal that many observers felt was already on life support.
The media giant is going a step further than calling off the $ 3.9 billion agreement, though, announcing it plans to sue Sinclair for breach of contract, saying the company’s negotiations with the Justice Department and Federal Communications Commission were “unnecessarily aggressive.”
“Our merger cannot be completed within an acceptable timeframe, if ever,” said Peter Kern, Tribune Media’s CEO in a statement. “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.”
Tribune’s lawsuit seeks compensation for all losses incurred “as a result of Sinclair’s material breaches of the Merger Agreement.” The company says Sinclair refused to see stations in required markets that were necessary to obtain federal approval of the deal.
“Sinclair’s entire course of conduct has been in blatant violation of the Merger Agreement and, but for Sinclair’s actions, the transaction could have closed long ago,” the company said.
The FCC warned going into its vote that it had “serious concerns” with Sinclair’s actions. On July 23, it voted to refer the deal to an administrative judge for a review, substantially lowering its chances for a positive outcome.
