Tribune calls off $3.9 billion deal with Sinclair

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

Tribune's move to kill the merger comes three weeks after the Federal Communications Commission voted unanimously against approving Sinclair's proposed acquisition of Tribune Media.

Approval of the merger was widely considered inevitable because Trump's FCC chairman, Ajit Pai, is notoriously anti-regulation and pro-merger, and had rolled back ownership rules for broadcast media companies past year in a manner that seemingly paved the way for the deal.

Sinclair did not immediately respond to requests for comment.

The tower of Tribune Broadcasting Los Angeles affiliate KTLA 5 is seen in Hollywood, Los Angeles, California, U.S., July 17, 2018. It also said the $60 million purchase price for Tribune's WGN-TV in Chicago "appeared to be significantly below market value". Sinclair would have stations in Philadelphia, Washington, DC, Virginia, Indianapolis, Seattle, Sacramento, Milwaukee, Kansas City, Des Moines, Denver, Dallas, Houston, New Orleans, Memphis, Miami, Greensboro, Richmond, Des Moines, San Diego, Salt Lake City, Oklahoma City, St. Louis and more. There have been rumors about ROH running a two-hour weekly show if they had the right venue.

A sticking point for regulators at the FCC and the Justice Department was a series of side deals that Sinclair had proposed in order to bring the combined company into compliance with regulations on the number of local TV stations a company could own.

The lawsuit, filed in Delaware Chancery Court on Thursday morning, uses similarly tough language regarding Sinclair and seeks damages "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".

Tribune said in the lawsuit that the merger agreement included a clause that when seeking to divest stations, Sinclair would sell in a manner that would avoid "even the threat" of any regulatory review. But the road ahead remains uncertain for Tribune Media.

Tribune, based in Chicago, claimed Thursday that Sinclair used "unnecessarily aggressive and protracted negotiations" with the Department of Justice and FCC over regulatory requirements and that it refused to sell the stations it needed to.

"Our merger can not be completed within an acceptable timeframe, if ever", said Tribune CEO Peter Kern in a statement. On Thursday, Kern said that any further delays would hurt his company - so the Tribune board chose to spike the deal.

By filing a lawsuit against Sinclair, Kern said, Tribune intends to "hold Sinclair accountable". Consolidated Adjusted EBITDA grew 69% versus the prior year period and 84% for the first half of the year.