Tribune pulls plug on $3.9B buyout by Sinclair

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"The complaint seeks compensation for all losses incurred as a result of Sinclair's material breaches of the merger agreement". The company already owned 173 stations in 81 markets.

"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 timeframe, if ever", said Tribune Media CEO Peter Kern, in a statement. The company, the largest owner of local television stations in the United States, has drawn attention recently for repeating claims by U.S President Donald Trump that traditional television and print publications offer "fake" or biased news.

Tribune Media Co.is on the hook for a $135 million breakup fee, according to the agreement reached a year ago. The reason Tribune has filed suit is that Sinclair agreed to use "best reasonable efforts" to make the sale happen by pursuing the sell off of some of its own stations. 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.

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Under the terms of the deal, Tribune and Sinclair had the right to call off the merger without paying a termination fee if it was not completed by August 8.

Hunt Valley, Md. -based Sinclair agreed to buy Tribune Media's 42 TV stations in May 2017, creating what would be the largest ownership group in the USA, with 233 stations. Complicating matters is that Pai is under investigation for relaxing FCC rules to allow groups like Sinclair to add more stations.

Tribune Media is a parent company of WGN-TV.

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Sinclair did not immediately comment on Thursday, but said last month "at no time have we withheld information or misled the FCC in any manner whatsoever". 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.

Under the terms of the deal, Tribune and Sinclair had the right to call off the deal without paying a termination fee if it was not completed by August 8.

It was admonished by media watchdogs in April after dozens of Sinclair news anchors read an identical script expressing concern about "one-sided news stories plaguing the country".

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Pai suddenly announced last month that he had "serious concerns" about the deal because Sinclair's divesture plan would still leave it effectively in control of TV stations in markets where its ownership exceeded FCC limitations, including in Chicago. It could have had a new show on WGN America or had an existing show moved there.

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