Tribune Media Cancels Sinclair Media's Purchase and Files Lawsuit

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

Tribune Media on Thursday terminated its controversial $3.9 billion merger agreement with Sinclair Broadcast Group.

"From virtually the moment the Merger Agreement was signed, Sinclair repeatedly and willfully breached its contractual obligations in spectacular fashion", the suit says. Sinclair also refused to sell certain stations that would have helped the deal secure regulatory approval, Tribune claims.

Sinclair initially announced plans to buy the media conglomerate fifteen months ago.

'This uncertainty and delay would be detrimental to our company and our shareholders'. The deal may also have hit a roadblock with the Justice Department, which reportedly was investigating whether Sinclair and Tribune violated antitrust laws by coordinating TV ad sales efforts in advance of the proposed merger.

The Federal Communications Commission (FCC) said in July that Sinclair "did not fully disclose" facts about the merger, raising questions about whether the company 'attempted to skirt the commission's broadcast ownership rules'.

"So sad and unfair that the FCC wouldn't approve the Sinclair Broadcast merger with Tribune", Trump tweeted.

The complaint seeks $1 billion from Sinclair to cover the "lost premium to Tribune's stockholders", plus "additional damages in an amount to be proven at trial".

Tribune, which is on the hook for a $135million breakup fee, filed a lawsuit against Sinclair, the largest U.S. broadcast station owner, alleging material breach of contract 15 months after the merger was first announced.

Odds may have seemed to favor Sinclair partly because of the broadcaster's conservative leanings and Sinclair Chairman David Smith's meetings with President Donald Trump.

On a conference call this morning, Kern told analysts that the company was disappointed the merger couldn't be consummated and said it had been a "huge undertaking" to assist Sinclair with trying to win approval for the transaction while maintaining steady operations at the company.

The merger was opposed by Democratic lawmakers, consumer advocacy groups, small cable companies, and Sinclair competitors.

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. "The American public and the American consumer do not need more media consolidation, and it's good that this deal is dead".

"Tribune's decision to pull the plug on the Sinclair merger is great news for consumers who will avoid paying the higher pay-TV rates the deal would have caused", ACA CEO Matthew Polka said.