Tribune Media withdraws from Sinclair merger, sues for $1 billion

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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.

Tribune seeks compensation for all losses incurred as a result of Sinclair's material breaches of the merger agreement.

"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.

Sinclair had proposed some revisions to its divesture plan last month, but those terms left Sinclair in control of stations under scrutiny, including in Chicago.

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Sinclair refused to sell stations in the markets as required to obtain regulatory approval, according to Tribune's release, prompting the FCC to put the merger on indefinite hold.

The Tribune Group on Thursday accused Sinclair of acting in bad faith and adopting an "unnecessarily aggressive" attitude toward regulators, and said it was taking Sinclair to court for breaching the agreement. By one estimate, the combined company would have owned stations in almost 3 out of 4 USA households, controlling an enormous amount of the content Americans see on local stations.

'Sinclair's entire course of conduct has been in blatant violation of the merger agreement and, but for Sinclair's actions, the transaction could have closed long ago, ' the company said.

The FCC recently sent the deal to an administrative law judge for a closer look because of concerns that Sinclair misrepresented facts in its application in order to circumvent the FCC's ownership rules. Tribune is seeking an amount "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".

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The deal's termination, which scuppers Sinclair's efforts to dramatically expand, comes after criticism by Democrats and public advocacy groups over whether the merger was in the public interest. It also said the $60 million purchase price for Tribune's WGN-TV in Chicago "appeared to be significantly below market value".

The Maryland company did not immediately respond early Thursday to a request for comment from The Associated Press.

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.

It's already been more than a year after the merger was announced; the two companies had previously said they would close the deal by the end of 2017.

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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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