A Tribune Media shareholder has filed a lawsuit in an attempt to block Sinclair Broadcast’s proposed $3.9 billion acquisition of the company.
Sean McEntire is pursuing a class-action suit in federal court in Chicago. According to the Chicago Tribune, McEntire is accusing Tribune Media of not giving the whole picture prior to the merger. Specifically, he said that Tribune Media has failed to provide all relevant financial projections as well as how much other bidders offered for Tribune Media.
The proposed deal would give Sinclair control of Tribune’s 42 TV stations and its cable networks including WGN America. Factor in other outstanding transactions like the recent Bonten Media deal, and Sinclair will hold 233 stations in about 108 markets, according to Moody’s.
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The proposed transaction has attracted the attention of Senate Democrats, who have asked for a special hearing on the deal.
Rebecca Hanson, vice president of strategy and policy for Sinclair, said the broadcaster is looking forward to showing policymakers the benefits the Tribune deal has in store for consumers and communities. But she also warned that the deal is necessary for broadcasters like Sinclair to keep pace with larger pay-TV operators.
"At a time of rapidly accelerating competition from the nation’s largest cable, satellite, wireless and internet companies, the combined Sinclair-Tribune will have the wherewithal to compete through innovation, including the roll out of ‘Next Gen’ television and enhanced investment in local news and original programming," Hanson said in a statement.
Meanwhile, the FCC is working on reinstating the UHF discount, a rule that allows broadcasters to count UHF signals at 50% toward the 39% national broadcast audience reach cap. The UHF discount’s return is likely critical to the Sinclair-Tribune deal, but some groups have urged the FCC to block it. The Institute for Public Representation filed an emergency motion on behalf of Free Press, Media Mobilizing Project, Prometheus Radio Project, National Hispanic Media Coalition and Common Cause.
Last month, the D.C. Court of Appeals denied those groups’ request for a stay of the rule’s reinstatement.