Tribune Media pulls out of Sinclair Broadcast merger

by Wade Massey August 10, 2018, 1:03
Tribune Media pulls out of Sinclair Broadcast merger

Separately, on Tuesday, Democratic members of Congress asked the FCC to investigate reports that "Sinclair Broadcasting illegally exercised control over the advertising activities of Tribune Media Company".

'In light of the FCC's unanimous decision, referring the issue of Sinclair's conduct for a hearing before an administrative law judge, our merger can not be completed within an acceptable time frame, if ever, ' said Tribune Media Chief Executive Officer Peter Kern. "Millions of people spoke out against this deal, and that public pressure was instrumental in keeping the spotlight on Sinclair".

Mike Huckabee, (R-Ark.), and FBN's Maria Bartiromo and Kristina Partsinevelos on Tribune Media terminating its merger agreement with Sinclair Broadcast Group.

Last month, FCC Chairman Ajit Pai expressed "serious concerns" regarding this merger, which would have created one of the largest broadcasting companies in the country and further consolidated the power of Sinclair, which owns almost 200 local stations throughout the US.

Tribune has filed a lawsuit against Sinclair for breach of contract. If no divestitures were made, "the combined company would reach 72 percent of USA television households and would own and operate the largest number of broadcast television stations of any station group", the FCC notes.

In May 2017, Sinclair proposed purchasing Tribune Media's 42 local TV stations and WGN America cable outlet, saying it would create a colossal TV station company owning, operating or providing services to 233 stations in 108 markets across the U.S. Nonetheless, the acquisition has been in limbo since then, awaiting regulatory approval from the Federal Communications Commission, which oversees the U.S. broadcast industry. The so-called sidecar agreement would have kept Sinclair essentially in charge of the Chicago station, with an option to buy it back for the same price within eight years.

The surprising announcement comes just hours after Sinclair, on Wednesday, said merger talks were continuing.

The FCC did not immediately comment on Thursday. Sinclair also refused to sell certain stations that would have helped the deal secure regulatory approval, Tribune claims.

The Maryland company said Thursday in a prepared statement that the Tribune lawsuit is "entirely without merit".

Analysts expect Tribune to seek another buyer. Sinclair defended the script as a way to distinguish its news shows from unreliable stories on social media. The FCC in July referred the merger to an administrative judge hearing, and called into question whether some of Sinclair's proposed divestments were a "sham".

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.


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