Sinclair to Pay $48 Million for Abandoning Acquisition Deal

U.S based Telecommunication and Media Company Sinclair Broadcast Group Inc. (SBGI) has been directed by the Federal Communications Commission (FCC) to pay $48 million as a civil penalty for abandoning an acquisition deal in which it was to purchase Tribune Media.

This is the largest ever civil penalty imposed by the agency, the penalty is twice as much existing record for a broadcaster. Chief executive of Sinclair, Chris Ripley, gave a press statement following the ruling in which he expressed the company’s satisfaction with the decision.

Sinclair is committed to continue to interact constructively with all of its regulators to ensure full compliance with applicable laws, rules and regulations,” said Ripley who also doubles up as Sinclair’s president.

According to FCC, Sinclair which happens to be the second largest television operator in U.S has agreed to abide by a strict compliance plan.

Sinclair’s conduct during its attempt to merge with Tribune was completely unacceptable. Today’s penalty, along with the failure of the Sinclair/Tribune transaction, should serve as a cautionary tale to other licensees seeking commission approval of a transaction in the future,” said FCC Chairman Ajit Pai.

The chairman said there were suggestions to provoke licenses of Sinclair but he turned down those suggestions.

Back in August 2018, Tribune terminated a deal to sale 42 TV stations in 33 markets to Sinclair, in the said markets Sinclair runs additional 191 stations. A month before Tribune ended the deal, FCC had questioned the frankness of Sinclair in the deal suggesting the company would effectively retain control over them.

U.S President Donald Trump backed the acquisition deal making it gain more momentum giving Sinclair an opportunity to build a national conservative-leaning TV powerhouse, one which would pose stiff competition to Fox Corp (FOXA) owned Fox news.

Tribune was purchased by Nexstar Media Group Inc. (NXST) last September in a deal totaling to $4.1 billion.

 

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