Tribune Media has backed out of its proposed $3.9 billion merger with Sinclair Broadcast Group and said it will be filing a lawsuit against the broadcasting giant for allegedly breaching their merger agreement.
As a result, Sinclair planned to sell off 21 of its stations. Tribune also filed a lawsuit, accusing Sinclair with breach of contract.
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. But the FCC had issues with the way Sinclair was approaching these sales and was concerned the company could buy the stations back after the merger was complete.
Sinclair is the nation's largest local broadcaster, reaching about 4 in 10 US households through TV stations. When the FCC shelved the deal, Trump said it was "So sad and unfair" that the agency in his administration wouldn't give its approval.
The deal was worth $3.9 billion for Tribune Media and would have added more than 40 stations including KTLA in Los Angeles, WPIX in NY and WGN-TV in Chicago to Sinclairs list of local affiliates.
Sinclair did not immediately respond to a request for comment sent outside business hours.
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Ultimately, the FCC concluded unanimously that Sinclair may have misrepresented or omitted material facts in its applications to circumvent the FCC's ownership rules and, accordingly, put the merger on indefinite hold while an administrative law judge determines whether Sinclair misled the FCC or acted with a lack of candor.
"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.
"This uncertainty and delay would be detrimental to our company and our shareholders".
Kern told employees in an email reviewed by Reuters that it was not clear what was next for Tribune.