Ajit Pai. Picture: REUTERS/ERIC GAILLARD
Ajit Pai. Picture: REUTERS/ERIC GAILLARD

Bengaluru/Washington — Tribune Media terminated its $3.9bn deal to be acquired by Sinclair Broadcast Group and filed suit, the company said on Thursday, after regulators had objected to the acquisition that received support from US President Donald Trump.

Tribune filed a lawsuit against Sinclair, the largest US broadcast station owner, alleging material breach of contract 15 months after the merger was first announced.

"To maintain control over stations it was obligated to sell, Sinclair engaged in unnecessarily aggressive and protracted negotiations with the department of justice and the FCC [Federal Communications Commission] over regulatory requirements," Tribune said.

"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 said in July that Sinclair "did not fully disclose" facts about the merger, raising questions about whether the company "attempted to skirt the commission’s broadcast ownership rules". FCC chairman Ajit Pai has been vocal in his opposition to the deal, a stance criticised by Trump.

Conservative voice

"So sad and unfair that the FCC wouldn’t approve the Sinclair Broadcast merger with Tribune. This would have been a great and much needed Conservative voice for and of the People," Trump said in a Twitter post in July.

Advocacy group Free Press said in an FCC filing in August 2017 that Sinclair forced its stations to "air pro-Trump propaganda and then seeks favours from the Trump administration".

Pai told the US Congress after Trump’s tweet that he stood by his decision to refer the issue to a hearing.

Sinclair, which owns 192 stations, said in May 2017 that it planned to acquire Chicago-based Tribune’s 42 TV stations in 33 markets in a deal that would significantly expand its reach.

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 FCC voted last month to refer the proposed merger to an administrative law judge to review questions about Sinclair’s candour, a move that analysts then said would be likely to prompt the deal’s collapse.

"In light of the FCC’s unanimous decision referring the issue ... our merger cannot be completed within an acceptable time frame, if ever," said Tribune Media CEO Peter Kern. "This uncertainty and delay would be detrimental to our company and our shareholders."

Kern told employees in an e-mail it was not clear what was next for Tribune.

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 Wednesday August 8.

Reuters