Tribune Media said Thursday that it would withdraw from its proposed merger with Sinclair Broadcast Group, while announcing a $1 billion lawsuit against Sinclair over its failed negotiations with federal regulators over the deal.
FCC Chairman Ajit Pai has been vocal in his opposition to the deal, a stance that was criticized by Trump. 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.
The FCC reportedly concluded that Sinclair may have misrepresented or omitted some facts in its applications in an attempt to get around the FCC's ownership rules.
Mike Huckabee, (R-Ark.), and FBN's Maria Bartiromo and Kristina Partsinevelos on Tribune Media terminating its merger agreement with Sinclair Broadcast Group.
Additional reporting from Newsy affiliate CNN.
Sinclair could not be reached immediately for comment.
The FCC raised questions after Sinclair had proposed to sell WGN to Maryland auto dealer Steven Fader, a longtime business associate of Sinclair Executive Chairman David Smith, as Sinclair would largely continue to operate the station under a services agreement. "It is unfortunate that Tribune Media Company terminated our merger agreement", CEO Chris Ripley said.
The Sinclair Broadcast Group deal to acquire KTLA's parent company Tribune Media is over.
A sign sits outside the studio of Tribune Media Company's WGN television studio on May 8, 2017 in Chicago, Illinois.
"Our merger can not be completed within an acceptable timeframe, if ever", Tribune CEO Peter Kern said in a statement.
Sinclair already has 173 stations around the country, including KENV in Salt Lake City, KOMO in Seattle and WKRC in Cincinnati. On Thursday, Kern said that any further delays would hurt his company - so the Tribune board made a decision to spike the deal.
Pai suddenly announced last month that he had "serious concerns" about the deal because Sinclair's divesture plan would still leave it effectively in control of TV stations in markets where its ownership exceeded FCC limitations, including in Chicago.
Sinclair has become a significant outlet for conservative views. One of the highest-profile deals in the current go-go period for media M&A has fallen apart, a stunning turn of events for a merger that once seemed all but inevitable. Sinclair has been scrutinized for its ties to the Trump administration. "It is especially great news for those consumers served by smaller video providers that have been victimized in the past by outrageous retransmission consent fee hikes and scurrilous signal blackouts by large corporate broadcasters". "This deal would have contributed to the trend where "local" news and "local" programming is created or scripted out of town".