On a conference call this morning, Kern told analysts that the company was disappointed the merger couldn't be consummated and said it had been a "huge undertaking" to assist Sinclair with trying to win approval for the transaction while maintaining steady operations at the company. That would violate antitrust laws.
If the purchase went through, Sinclair would have a foothold in major markets like New York City and Los Angeles.
Ted Rouse, a Chicago-based partner with Bain & Company specializing in mergers and acquisitions, said it may be hard for Tribune Media to return to business as usual after 15 months in limbo. Sinclair would have stations in Philadelphia, Washington, DC, Virginia, Indianapolis, Seattle, Sacramento, Milwaukee, Kansas City, Des Moines, Denver, Dallas, Houston, New Orleans, Memphis, Miami, Greensboro, Richmond, Des Moines, San Diego, Salt Lake City, Oklahoma City, St. Louis and more. The operator of the WGN America network posted revenue of $489.4 million in the period, also beating expectations.
Sinclair already has 173 stations around the country, including KENV in Salt Lake City, KOMO in Seattle and WKRC in Cincinnati.
The FCC's concerns followed similar questions raised in separate filings by the American Civil Liberties Union and conservative news outlet Newsmax Media.
The $3.9 billion deal would have given Sinclair control of more than 200 local television stations broadcasting to 72 percent of the United States population, and the announcement of the proposed merger in May 2017 raised concerns about Sinclair's market dominance. ("Sinclair"), and that it has filed a lawsuit in the Delaware Chancery Court against Sinclair for breach of contract.
Sinclair refused to sell stations in the markets as required to obtain regulatory approval, according to Tribune's release, prompting the FCC to put the merger on indefinite hold.
In a bid to reassure regulators, Sinclair said it was willing to relinquish 23 stations but the FCC accused the local new giant of trying to retain control of several of them, and cited a lack of transparency in its plans.
'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 can not be completed within an acceptable time frame, if ever, ' said Tribune Media Chief Executive Officer Peter Kern. "Further delay and uncertainly would be detrimental to our company, our business partners and our shareholders, and accordingly, our board made a decision to terminate the merger agreement with Sinclair".
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