STREAMING NOW: Watch Now

Tribune calls off $3.9 billion Sinclair media deal

The Sinclair Broadcast Group acquisition of Tribune Media is dead.Tribune said in a statement Thursda...

Posted: Aug 9, 2018 7:32 PM
Updated: Aug 9, 2018 7:32 PM

The Sinclair Broadcast Group acquisition of Tribune Media is dead.

Tribune said in a statement Thursday that it has terminated its merger agreement with Sinclair, scuttling a $3.9 billion deal that would have given the broadcasting group an even broader reach into American living rooms. It's also suing Sinclair for breach of contract.

The breakup of the deal is a stinging defeat for Sinclair, owner of dozens of local television stations. Sinclair has been scrutinized for its ties to the Trump administration.

Tribune had been expected to walk away after the deal came under scrutiny from US regulators. The FCC in July referred the merger to an administrative judge hearing, often a death knell for these types of deals. The commissioners called into question whether some of Sinclair's proposed divestments were a "sham" because they were being sold to people so closely aligned with Sinclair and in agreements that would still allow Sinclair to operate the stations.

Wednesday was the first day Tribune was allowed to pull out of the deal, per the merger agreement. That's when Tribune board voted to walk away.

Not only is it pulling out of the deal, but Tribune is suing Sinclair, arguing Sinclair's negotiations with the US Justice Department and FCC were "unnecessarily aggressive." Sinclair also refused to sell certain stations that would have helped the deal secure regulatory approval, Tribune claimed in a news release.

"Our merger cannot be completed within an acceptable timeframe, if ever," Tribune CEO Peter Kern said in a statement.

The lawsuit, filed in Delaware Chancery Court on Thursday morning, uses similarly tough language regarding Sinclair and seeks damages "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."

Sinclair "repeatedly and willfully breached its contractual obligations in spectacular fashion," the lawsuit alleges, saying that government regulators laid out a "clear path" that Sinclair ignored.

"In an effort to maintain control over stations it was obligated to sell if advisable to obtain regulatory clearance, Sinclair engaged in belligerent and unnecessarily protracted negations with DOJ and the FCC over regulator requirements... all in the service of Sinclair's self-interest and in derogation of its contractual obligations," the suit alleges.

Tribune said in the lawsuit that the merger agreement included a clause that when seeking to divest stations, Sinclair would sell in a manner that would avoid "even the threat" of any regulatory review.

But Sinclair, the lawsuit alleges, went so far as to invite legal action from the Justice Department, which was also reviewing the deal, going "so far as to threaten to file its own lawsuit against DOJ." The lawsuit also alleges that Sinclair was "confrontational with and belittling of DOJ staff" including DOJ antitrust chief Makan Delrahim.

In a statement issued Thursday afternoon, Sinclair CEO Chris Ripley said the company was "disappointed" that the acquisition failed.

"We unequivocally stand by our position that we did not mislead the FCC with respect to the transaction or act in any way other than with complete candor and transparency," Ripley said. "As Tribune, however commented, in their belief, the FCC's recent designation of the deal for a hearing in front of an Administrative Law Judge would have resulted in a potentially long and burdensome process and, therefore, pursuing the transaction was not in the best interest of their company and shareholders."

"As for Tribune's lawsuit, we fully complied with our obligations under the merger agreement and tirelessly worked to close this transaction. The lawsuit described in Tribune's public filings today is entirely without merit, and we intend to defend against it vigorously," Ripley said.

Tribune employees were notified that the deal was off in a lengthy early-morning memo from Kern that blasted Sinclair and said Tribune had done "everything it was supposed to do."

Kern acknowledged that there would be "speculation" about who might buy Tribune, but urged employees to "shake off the cobwebs of deal distraction, ignore the outside noise, and continue delivering on our commitment to each other, to our customers, to our partners and to the communities we serve."

Analysts expect Tribune to seek another buyer. A high ranking source inside Sinclair suggested to CNN one of those buyers could be Rupert Murdoch's Fox. Disney will buy most of 21st Century Fox, but Murdoch will still control Fox's broadcast, sports and news networks.

-- CNN's Brian Stelter contributed to this report

Minnesota Coronavirus Cases

Data is updated nightly.

Confirmed Cases: 36716

Reported Deaths: 1482
CountyConfirmedDeaths
Hennepin11892776
Ramsey4724218
Stearns228719
Dakota221889
Anoka2124107
Nobles16556
Olmsted105815
Washington102540
Mower9282
Rice8247
Scott6714
Clay57637
Kandiyohi5651
Wright4485
Blue Earth4222
Todd4002
Carver3481
Lyon3002
Sherburne2974
Freeborn2860
Steele2190
Benton2083
Watonwan2060
St. Louis16915
Martin1615
Nicollet14912
Cottonwood1340
Goodhue1248
Winona11915
Pine1030
Crow Wing10212
Chisago951
Otter Tail921
Le Sueur861
McLeod850
Carlton830
Dodge810
Polk812
Unassigned8137
Chippewa761
Itasca6512
Isanti640
Douglas610
Meeker581
Waseca580
Morrison571
Becker550
Jackson540
Faribault530
Murray510
Pennington510
Sibley482
Mille Lacs342
Brown312
Wabasha310
Rock290
Yellow Medicine290
Beltrami280
Renville282
Fillmore270
Pipestone261
Houston240
Norman200
Swift201
Wilkin203
Redwood170
Wadena150
Aitkin140
Big Stone140
Kanabec141
Koochiching141
Cass122
Marshall120
Pope100
Lincoln90
Roseau90
Grant80
Clearwater70
Mahnomen71
Lake60
Hubbard50
Traverse50
Lac qui Parle40
Stevens40
Red Lake30
Kittson20
Cook10
Lake of the Woods00

Iowa Coronavirus Cases

Data is updated nightly.

Confirmed Cases: 29429

Reported Deaths: 716
CountyConfirmedDeaths
Polk6120178
Woodbury317744
Black Hawk213058
Buena Vista169711
Linn121582
Dallas119429
Johnson11818
Marshall101618
Story7223
Pottawattamie70111
Wapello70130
Crawford6672
Scott66410
Muscatine62044
Dubuque53922
Sioux4570
Tama45129
Wright3750
Louisa36013
Jasper31817
Plymouth3054
Dickinson2492
Warren2491
Washington2299
Hamilton1851
Webster1682
Boone1361
Allamakee1264
Clarke1262
Clay1260
Mahaska11517
Shelby1060
Cerro Gordo1051
Poweshiek1048
Clinton991
Bremer886
Carroll861
Des Moines853
Pocahontas841
Henry823
Taylor790
Franklin780
Cedar771
Emmet750
Cherokee730
Monona710
Floyd662
Marion660
Guthrie644
Hardin630
Sac630
Benton591
Osceola560
Jones550
Jefferson530
Harrison510
Humboldt511
Iowa500
Monroe506
Lee492
Butler472
Calhoun472
Hancock470
Buchanan461
Delaware451
Lyon400
Clayton393
Davis381
Madison372
Grundy340
Mills340
Fayette330
Kossuth320
Winneshiek320
Palo Alto310
Lucas304
Greene280
Mitchell280
Chickasaw270
Howard270
Winnebago260
Jackson250
Union250
Ida220
Appanoose203
Page200
Keokuk191
Van Buren190
Cass170
Audubon161
Adair150
Ringgold150
Worth140
Decatur100
Montgomery102
Adams80
Wayne80
Fremont70
Unassigned40
Rochester
Clear
85° wxIcon
Hi: 88° Lo: 64°
Feels Like: 86°
Mason City
Clear
87° wxIcon
Hi: 89° Lo: 65°
Feels Like: 89°
Albert Lea
Clear
88° wxIcon
Hi: 87° Lo: 66°
Feels Like: 90°
Austin
Scattered Clouds
88° wxIcon
Hi: 88° Lo: 67°
Feels Like: 90°
Charles City
Clear
86° wxIcon
Hi: 88° Lo: 67°
Feels Like: 88°
HOT AND HUMID
KIMT Radar
KIMT Eye in the sky

Latest Video

Image

Raising money for Veteran's roof repair

Image

Alive and Kicking Outdoor Carnival

Image

Beating the Heat at Cascade Lake

Image

Operation Dry Water

Image

Pets and Fireworks

Image

4th Of July Firework Safety

Image

City Administrator Transition Out Of Position

Image

Domestic Pet Act Signed Into Law

Image

AI Driven Emergency Medicine Platform

Image

Governor Reynolds in North Iowa

Community Events