August 18, 2019

Tribune Ends Deal With Sinclair, Dashing Plan for Conservative TV Behemoth

Mr. Ruddy saw Tribune’s decision to pull out of the deal as a personal victory. “I like taking on hopeless causes, especially when I believe the facts and good sense argue for such a cause,” he said. “Opposition to this merger brought together members of both parties in Congress, as well as groups and individuals across the political spectrum.”

The agreement between Sinclair, which is led by David D. Smith, and Tribune had allowed either to walk away if the deal did not close by Wednesday. Tribune said in its statement that it would seek compensation for all losses incurred from what it called Sinclair’s breach of the agreement, an amount it pegged at more than $1 billion.

The lawsuit details a litany of combative exchanges between Sinclair and the Justice Department. In November, the agency informed Sinclair it would need to sell off stations in at least 10 markets to obtain approval, but Sinclair refused, “deciding instead to antagonize D.O.J. officials,” the suit read. Meetings became so contentious, it said, that Sinclair effectively threatened the department to “sue me.”

Sinclair required approval from the Justice Department and the F.C.C., a process typically undertaken at the same time. But Sinclair preferred to broker an agreement first with the Justice Department, as it considered the F.C.C., and Mr. Pai, to be more friendly to mergers.

In a December letter addressed to the head of the Justice Department’s Antitrust Division, Makan Delrahim, Sinclair contrasted his position to that of Mr. Pai. “It was so refreshing to see the F.C.C., under Ajit Pai’s leadership, undertake a fundamental reform of its media ownership rules to relax regulations,” the letter read. It continued, “we have been surprised, therefore, by the extent to which the Division has thus far appeared unwilling to recognize how completely the world has changed,” referring to the Justice Department.

To satisfy rules that prohibit one company from owning the airwaves on such a dominant scale, Sinclair had proposed selling 23 television stations after the deal was completed. But under the proposal, several of the stations would still have effectively fallen within Sinclair’s operational control — a fact that the F.C.C. said raised “significant questions as to whether those proposed divestitures were in fact ‘sham’ transactions.”

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