Sinclair countersues Tribune Media over failed merger
Sinclair Broadcast Group Inc. filed a countersuit Wednesday in an escalating legal battle with Tribune Media Co., after the two companies’ proposed merger fell apart this month under federal scrutiny.
The counterclaim maintains that Sinclair “pushed hard†to secure regulatory approval for the proposed tie-up and called Tribune’s subsequent attempt to distance itself from Sinclair “self-serving.†Sinclair is asking a Delaware court to find that Tribune was the one that broke the terms of the merger agreement.
“Tribune, through its meritless lawsuit, is seeking to capitalize on an unfavorable and unexpected reaction from the Federal Communications Commission to capture a windfall for Tribune,†Sinclair Chief Executive Chris Ripley said.
Sinclair’s filing comes weeks after Tribune sued Sinclair alleging breach of contract. Tribune’s suit alleges that Sinclair’s dealings with regulators charged with reviewing the deal were marked by “belligerent and unnecessarily protracted negotiations.†Tribune is seeking damages of $1 billion in that suit.
Sinclair, based in Hunt Valley, Md., had sought to buy dozens of broadcast stations from Chicago-based Tribune in a $3.9-billion deal. But last month, the FCC voted to subject the proposal to further legal review after Chairman Ajit Pai raised “serious concerns.â€
Pai said that certain stations Sinclair had proposed selling off as a condition of the deal risked staying within Sinclair’s effective control, which could violate federal regulations. There were other concerns that Sinclair may have been less than transparent with the agency over its divestiture plans, Pai said at the time.
Although Sinclair insisted that it had fully complied with regulators, the FCC’s decision to send the merger to an administrative law judge became a turning point for the deal. On Aug. 8, Tribune withdrew from the plan and sued Sinclair.
Tribune didn’t immediately respond to a request for comment on the countersuit.
Fung writes for the Washington Post.
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