In an announcement early Thursday morning, Tribune blamed Sinclair for the regulatory roadblocks that the deal has encountered at the Federal Communications Commission (FCC). Sinclair already own 39% of the TV stations in the U.S., and this would have raised that to 42%.
The company was admonished by media watchdogs in April after dozens of Sinclair news anchors read an identical script expressing concern about "one-sided news stories plaguing the country".
Had the merger with Tribune Media been approved, Sinclair would have completely dominated the local news market. The commissioners called into question whether some of Sinclair's proposed divestments were a "sham" because they were being sold to people so closely aligned with Sinclair and in agreements that would still allow Sinclair to operate the stations. Sinclair also refused to sell certain stations that would have helped the deal secure regulatory approval, Tribune claims.
'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 over regulatory requirements, ' Tribune said.
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"So sad and unfair that the FCC wouldn't approve the Sinclair Broadcast merger with Tribune", Trump tweeted. Tribune is seeking an amount "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".
The FCC concluded unanimously that Sinclair may have misrepresented or omitted material facts in its applications in order 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 the case of Sinclair-Tribune, there is no such fee attached to the merger agreement.
Sinclair did not immediately respond to requests for comment. It also said the $60 million purchase price for Tribune's WGN-TV in Chicago "appeared to be significantly below market value". The deal may also have hit a roadblock with the Justice Department, which reportedly was investigating whether Sinclair and Tribune violated antitrust laws by coordinating TV ad sales efforts in advance of the proposed merger. Sinclair defended the script as a way to distinguish its news shows from unreliable stories on social media.
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.