Tribune calls off $3.9B buyout by Sinclair

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Sinclair, a Maryland-based company which is the largest owner of local news stations in the US, is notorious for its right-wing, pro-Trump slant, and its unusual system of distributing slanted "must-run" content to its local stations to work into their broadcasts.

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

Sinclair Broadcast Group Inc. wanted the Chicago company's 42 TV stations and had agreed to dump nearly two dozen of its own to score approval by the Federal Communications Commission.

Last month, however, FCC Chairman Ajit Pai said that he had "serious concerns" about the deal, saying that Sinclair might still be able to operate the stations "in practice, even if not in name".

According to Tribune, Sinclair committed to use reasonable best efforts to obtain regulatory approval as promptly as possible, instead, Sinclair engaged in unnecessarily aggressive and protracted negotiations with the Department of Justice and the Federal Communications Commission over regulatory requirements. "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".

As for Tribune's lawsuit, Ripley said Sinclair "fully complied with our obligations under the merger agreement and tirelessly worked to close this transaction".

The Sinclair Broadcast Group was its roots in the early 1970s, when Julian Sinclair Smith operated an FM radio station and a TV station in Baltimore. It also follows a significant blow from the Republican-led Federal Communications Commission last month, when it questioned Sinclair's candor over the planned sale of some stations.

The FCC did not immediately comment on Thursday.

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". Here, the WGN Radio sign appears on the side of Tribune Tower in downtown Chicago.

Kern told employees in an email reviewed by Reuters that it was not clear what was next for Tribune.

Kern said he would continue to run the company until Tribune reached a "permanent state". Subsequently, the FCC voted to subject Sinclair's divesture plan to a hearing before an administrative law judge, further delaying completion of the transaction.

The two companies had until midnight Wednesday to call off their deal.

Sinclair already has 173 stations around the country, including KENV in Salt Lake City, KOMO in Seattle and WKRC in Cincinnati.

By filing a lawsuit against Sinclair, Kern said, Tribune intends to "hold Sinclair accountable".

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