Tribune pulls plug on $3.9B buyout by Sinclair

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Tribune pulls plug on $3.9B buyout by Sinclair

Tribune withdrew Thursday from its $3.9 billion buyout by Sinclair and it's filing a lawsuit against it, citing breach of contract. Sinclair also refused to sell certain stations that would have helped the deal secure regulatory approval, Tribune claimed in a news release.

In a surprise move in July, however, Pai said he had "serious concerns" and suggested Sinclair was trying to hide anticompetitive practices in its proposed purchase and divestiture of certain stations. "Further delay and uncertainly would be detrimental to our company, our business partners and our shareholders, and accordingly, our board chose to terminate the merger agreement with Sinclair".

The Tribune Group on Thursday accused Sinclair of acting in bad faith and adopting an "unnecessarily aggressive" attitude toward regulators, and said it was taking Sinclair to court for breaching the agreement.

But optimism about the merger's chances evaporated last month when Pai announced that he had "serious concerns" and proposed sending it before an administrative law judge.

"We are extremely disappointed that after 15 months of trying to close the Tribune transaction, we are instead announcing its termination", said Sinclair CEO Chris Ripley. But the FCC had issues with the way Sinclair was approaching these sales and was concerned the company could buy the stations back after the merger was complete.

The turnabout has ruined plans by the Smith family that controls Sinclair to buy more than 30 more TV stations from Chicago-based Tribune Media, to add to its current roster of more than 190 stations.

A sticking point for regulators at the FCC and the Justice Department was a series of side deals that Sinclair had proposed in order to bring the combined company into compliance with regulations on the number of local TV stations a company could own.

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'.

At the time, President Donald Trump tweeted his support of the company.

The merger was opposed by Democratic lawmakers, consumer advocacy groups, small cable companies, and Sinclair competitors. "The American public and the American consumer do not need more media consolidation, and it's good that this deal is dead". As elaborated in the complaint we filed earlier today, 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. "It is especially great news for those consumers served by smaller video providers that have been victimized in the past by outrageous retransmission consent fee hikes and scurrilous signal blackouts by large corporate broadcasters".

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