Sinclair Broadcasting files countersuit against Tribune in failed merger deal

Sinclair Broadcast Group, Inc.’s headquarters in Hunt Valley, Md., is depicted in this Oct. 12, 2004, photo. Tribune Media is ending its $3.9 billion deal with Sinclair Broadcast and has filed a lawsuit against Sinclair for breach of contract. Sinclair had offered to buy Tribune’s 42 TV stations. The two companies had until midnight on Aug. 8, 2018 to call the deal off and have been facing tough regulatory challenges. (AP Photo/Steve Ruark, File)

(Courthouse News) The Sinclair Broadcast Group filed a countersuit Wednesday against its former merger partner Tribune Media — a delayed response to Tribune Media calling off its impending $3.9 billion merger with Sinclair and suing the broadcaster for $1 billion instead.

Sinclair owns the NBC affiliate KECI in Missoula.

“We were extremely disappointed that the Tribune transaction was terminated,” Chris Ripley, Sinclair’s president & chief executive officer said in a statement Wednesday. “We are likewise disappointed that Tribune, through its meritless lawsuit, is seeking to capitalize on an unfavorable and unexpected reaction from the Federal Communications Commission.”

Sinclair countersued for breach of the agreement in the Delaware Court of Chancery, seeking “approximately $1 billion of lost premium to Tribune’s stockholders and additional damages in an amount to be proven at trial.”

Ripley’s statement continued, saying that Sinclair fully complied with its obligations under the merger agreement, working tirelessly to close the transaction.

Sinclair’s lawsuit says it was trying to bargain with the FCC to negotiate the best terms. Tribune, in compliance with the agreement between the two media giants, aided in those efforts without objection, according to Sinclair.

Both companies, Sinclair’s suit says, spent months sorting through legal details with regulators “attending meetings, reviewing drafts of responses and adjusting the proposed divestitures.”

Tribune pulled out of the merger on Aug. 9 after the FCC sent the merger for review by an administrative hearing judge in the wake of FCC Commissioner Ajit Pai raising “serious concerns” about the deal being in the public interest.

The deal announced between Sinclair and Tribune in May 2017 proposed Sinclair’s acquisition of Tribune and its 42 TV stations — an addition that would have given Sinclair the ability to reach 72 percent of U.S. households.

Tribune’s lawsuit, alleging breach of contract, claimed that Sinclair tried to avoid selling television stations, which would place them in violation of the FCC’s ownership guidelines.

“Sinclair nevertheless remained focused on exploring all potential options to address the FCC’s concerns and publicly announced that it remained fully committed to the Transaction,” the lawsuit said. “Unfortunately, Tribune did not share that mission.”

In a response, Tribune denied Sinclair’s countersuit held any worth.

“Sinclair’s counterclaim to Tribune’s complaint is entirely meritless and simply an attempt to distract from its own significant legal exposure resulting from its persistent violations of Tribune’s contractual rights,” the statement said. “As detailed in Tribune’s complaint, Sinclair repeatedly and willfully breached its contractual obligations during what should have been a straightforward regulatory review process.”