Tribune calls off merger, blasts Sinclair for circumventing FCC rules
Aug 11 2018
Kern said he would continue to run the company until Tribune reached a "permanent state".
Nexstar Media Group (NXST.O) and Twenty-First Century Fox Inc (FOXA.O), partnering with private equity, had considering buying Tribune before Sinclair announced its deal and are likely bidders, analysts have said.
As of Thursday morning, Sinclair hadn't released a statement about the failed merger.
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". Hearings can take months, and the prospect of enduring one killed previous deals.
"Our merger can not be completed within an acceptable timeframe, if ever", said Tribune CEO Peter Kern in a statement. The agency also questioned links between the Maryland-based broadcaster and a buyer proposed for stations in Dallas and Houston.
The original deal would have meant creating the biggest USA television company, adding Tribune's 42 stations to Sinclair's roster. Sinclair would have stations in Philadelphia, Washington, DC, Virginia, Indianapolis, Seattle, Sacramento, Milwaukee, Kansas City, Des Moines, Denver, Dallas, Houston, New Orleans, Memphis, Miami, Greensboro, Richmond, Des Moines, San Diego, Salt Lake City, Oklahoma City, St. Louis and more. By one estimate, the combined company would have owned stations in almost 3 out of 4 US households, controlling an enormous amount of the content Americans see on local stations. For example, Pai led the charge on reinstating a type of agency accounting method that effectively helps broadcast companies own more stations while remaining beneath the national audience cap. 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.
As for Tribune's lawsuit, Ripley said Sinclair "fully complied with our obligations under the merger agreement and tirelessly worked to close this transaction". It would have been able to expand rapidly into numerous new markets with the Tribune acquisition. His administration has ties to Sinclair and when the FCC threw its curveball, he complained on Twitter, calling it "sad" that the deal seemed unlikely to go through. "This uncertainty and delay would be detrimental to our company and our shareholders. and, by way of our lawsuit, intend to hold Sinclair accountable".
Sinclair did not immediately respond to requests for comment. "Instead, Sinclair fought, threatened, insulted, and misled regulators in a misguided and ultimately unsuccessful attempt to retain control over stations that it was obligated to sell".
Sinclair has become a significant outlet for conservative views.