Sinclair Broadcast Group filed a countersuit Wednesday in an escalating legal battle with Tribune Media after the 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 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 for breach of contract, alleging 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 its lawsuit.
Sinclair had sought to purchase dozens of broadcast stations from Tribune in a $3.9 billion deal. But the FCC voted last month to subject the proposal to further legal review, over “serious concerns” raised by Chairman Ajit Pai.
Pai said 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 said in a statement that Sinclair’s claim “is entirely meritless and simply an attempt to distract from its own significant legal exposure." The company added that Sinclair’s behavior before the FCC — culminating in the order for a legal review — meant little hope for a swift resolution, or approval “in any reasonable timeframe.”