Sinclair Pays Tribune $60 Million To Settle Lawsuit Over Dodgy Merger

from the shell-games dept

Last year when Sinclair attempted acquire Tribune Broadcasting for a cool $3.9 billion, you might recall the company was accused of some highly unethical behavior in order to get the deal done. Despite the FCC doing its best to neuter most media consolidation protections to help move the deal forward, the union would have still resulted in the merged company violating media ownership limits and dominating local broadcasting in a huge number of new markets.

To get around those limits, Sinclair allegedly got, uh, creative. Consumer groups accused Sinclair of trying to offload several of its companies to Sinclair-owned shell companies to pretend the deal would remain under the government's ownership cap. The company also tried something similar in trying to offload some stations to friends and other partner companies at highly discounted rates, allowing it to technically not "own" -- but still control -- those stations.

It was all so dodgy that even the Ajit Pai FCC, which had initially been doing cartwheels to clear the way for the merger, had to back away from its support of the deal, shoveling deal approval off to an administrative law judge for review (aka the "kiss of death"). Tribune was then forced to kill the merger, and quickly thereafter filed a lawsuit against Sinclair for monumentally flubbing the deal.

Fast forward to this week. A Sinclair filing with the SEC indicates the company has paid Nexstar (which bought Tribune last year) a cool $60 million and a few local broadcast stations to "avoid the costs, distraction, and uncertainties of continued litigation" with neither company admitting they ever did anything wrong:

"Neither party has admitted any liability or wrongdoing in connection with the terminated merger; both parties have settled the lawsuit to avoid the costs, distraction, and uncertainties of continued litigation."

Granted so far, nobody at the FCC (or anywhere else) has actually punished Sinclair for allegedly misleading regulators. And all of the FCC's efforts to effectively obliterate decades-old media consolidation restrictions (you know, the ones keeping giant monopolies from crushing local, diverse news and media outlets) remain intact, paving the way for the next massive consolidation push in the sector nobody really asked for.

Hide this

Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.

Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.

While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.

–The Techdirt Team

Filed Under: fcc, media ownership, merger
Companies: nexstar, sinclair broadcasting, tribune company


Reader Comments

Subscribe: RSS

View by: Time | Thread


  1. identicon
    Anonymous Coward, 3 Feb 2020 @ 7:24am

    Regulatory Capture at work

    This ladies and gentlemen is what Regulatory Capture looks like from the point of view of the person on the street.

    link to this | view in thread ]

  2. icon
    Anonymous Anonymous Coward (profile), 3 Feb 2020 @ 7:39am

    Re: Regulatory Capture at work

    Except that it didn't work in this instance. The real tragedy is the ongoing ability for wrongdoers to deny responsibility, and that goes for the merger participants and the regulator that encouraged the merger, until he didn't.

    link to this | view in thread ]

  3. identicon
    Anonymous Coward, 3 Feb 2020 @ 7:51am

    The underlying business strategy seems to be, do what you want and get your minions to cover your tracks after the fact.
    Are these the same folk who push the law 'n order mantra asking for tougher laws, zero tolerance, minimum sentencing and a parole system designed for business opportunity?

    link to this | view in thread ]

  4. identicon
    Anonymous Coward, 3 Feb 2020 @ 9:48am

    Is That Fair?

    "Sinclair Pays Tribune $60 Million..."

    Won't know whether that amount's fair until we find out how much Sinclair paid Ajit Pai.

    link to this | view in thread ]

  5. identicon
    Anonymous Coward, 3 Feb 2020 @ 9:00pm

    And what will Tribune do to chastise itself for even considering the deal in the first place? (Sure, Sinclair is way more evil.)

    link to this | view in thread ]


Follow Techdirt
Essential Reading
Techdirt Deals
Report this ad  |  Hide Techdirt ads
Techdirt Insider Discord

The latest chatter on the Techdirt Insider Discord channel...

Loading...
Recent Stories

This site, like most other sites on the web, uses cookies. For more information, see our privacy policy. Got it
Close

Email This

This feature is only available to registered users. Register or sign in to use it.