Tribune Media terminated its $3.9 billion merger agreement with Sinclair Broadcasting Group and sued the company for breach of contract.
Tribune officials said Sinclair agreed to seek regulatory approval for the merger in a reasonable time frame and divest from whatever markets were necessary to receive approval. However, the company engaged in a lengthy battle with federal regulators to avoid selling certain television stations. The Federal Communications Commission ultimately concluded Sinclair may have misrepresented information in its merger application and put the merger on indefinite hold while an administrative law judge investigates the matter.
Tribune Media has filed a lawsuit against Sinclair seeking compensation for losses the company said it incurred as a result of Sinclair's breaches of the merger agreement.
"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 cannot be completed within an acceptable time frame, if ever," said Tribune Media CEO Peter Kern in a prepared statement. "This uncertainty and delay would be detrimental to our company and our shareholders. Accordingly, we have exercised our right to terminate the merger agreement, and, by way of our lawsuit, intend to hold Sinclair accountable."