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Sinclair and Tribune Part 2: The Redux


Weeters

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So does this also mean the the "pending" sale to FOX on some tribune stations, is also dead?

 

Unlikely. My guess is that everyone is taking a step back and letting things cool off before deciding what the next steps will be.

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Do you hear that? It's the sound of this forum collectively unpuckering its buttholes over the near merger of Sinclair and Tribune.

I also heard the sound of this forum collectively breathing a sigh of relief over its termination.

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If Sinclair was wise, they would step back from any attempts at mergers at this point... Any company willing to merge with Sinclair at this point may as well have their heads examined... This lawsuit will be very hairy and interesting to say the least... With all the popcorn I'll be eating watching this, I hope to lose 10 pounds by the end of this...

 

I don't think they can sit it out.

 

You have to suit-up if you want to play the game.

 

Just how big a "hit" can Sinclair take...and still "try" to play the game.

 

Cuz you ain't seen nothing yet.

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Unlikely. My guess is that everyone is taking a step back and letting things cool off before deciding what the next steps will be.

 

The FCC needs to tell broadcaster what EXACTLY the new rules are so there is NO questions.

 

Give us direction!

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The Complaint for Damages and accompanying exhibits in Tribune v. Sinclair have been released by Tribune.

 

The complaint centers around divestitures in the Sinclair/Tribune overlap DMAs, especially Harrisburg, Greensboro, and above all, St. Louis:

 

As it turned out, this did not end the disputation. On further review, DOJ concluded that Sinclair would indeed have to divest a Big-4 station in Greensboro and, later, that it would have to sell a Big-4 station, rather than the CW, in St. Louis. Sinclair twisted and turned every step of the way. For example, on February 20, Mr. Faber informed the FCC that DOJ had tentatively agreed to allow Sinclair to keep its Big-4 stations in St. Louis, even though DAAG Finch that same day had advised Tribune and Sinclair that DOJ had not agreed to permit the divestiture in St. Louis to be a non-Big-4 station. Similarly, around March 21, AAG Delrahim once again informed Mr. Kolasky that agreement by Sinclair to divest a Big-4 station in all ten Overlap DMAs – including in both Greensboro and St. Louis – would resolve the Merger investigation. Still, Sinclair continued to haggle over St. Louis.

 

In the ensuing weeks, Sinclair’s position at DOJ continued to worsen. Although Sinclair and DOJ agreed to a term sheet in April 2018 requiring divestitures in all ten overlap markets – including Big-4 divestitures in all markets except potentially St. Louis – they did not reach a definitive settlement and their discussions on significant provisions remained ongoing as of August 2018. By August, even putative negotiation over St. Louis had been closed off: DOJ rejected Sinclair’s proposed buyer for the St. Louis CW station and demanded a Big-4 divestiture instead.

 

It also explains that selling WGN to Fader allowed Sinclair to preserve the more lucrative Tribune-era retrans contracts and the potential revenue they represented.

 

———

 

While I'm here...

 

I saw the termination coming from a mile away based on the mere presence of the earnings call, but I did not expect a lawsuit seeking a billion dollars in damages. We're in for a wild ride, folks.

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I don’t know how long this plays out in court, but I suspect FOX stays away from Trib until it does, meaning they’re screwed in getting what they want out of this, potentially for a long while.

 

And if Trib gets all one billion dollars out of this, that’s a lot of spending money and they could potentially become buyers.

Where’s a Dan Rather election colloquialism when you need one?

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The FCC needs to tell broadcaster what EXACTLY the new rules are so there is NO questions.

 

Give us direction!

This FCC has been given a clear definition of “good dereg” (Raycom-Gray) vs. “bad dereg” (Sinclair-Tribune) that they’d be nuts not to address. It’s only a matter of when they do it.

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The Complaint for Damages and accompanying exhibits in Tribune v. Sinclair have been released by Tribune.

 

The complaint centers around divestitures in the Sinclair/Tribune overlap DMAs, especially Harrisburg, Greensboro, and above all, St. Louis:

 

 

 

It also explains that selling WGN to Fader allowed Sinclair to preserve the more lucrative Tribune-era retrans contracts and the potential revenue they represented.

 

———

 

While I'm here...

 

I saw the termination coming from a mile away based on the mere presence of the earnings call, but I did not expect a lawsuit seeking a billion dollars in damages. We're in for a wild ride, folks.

 

Apparently, Sinclair did not want to have to divest anything and wanted the DOJ to sue them to force divestitures, and they also threatened to sue the DOJ! This led to Tribune threatening to filing a suit against Sinclair in February for breaching its obligations under the merger agreement. It was then that Sinclair agreed to the divestitures, and even then they still wanted to get the DOJ to change its mind about certain stations.

 

11. Beginning in November 2017, DOJ repeatedly told Sinclair that it would clear the Merger if Sinclair simply agreed to sell stations in the ten markets the parties had identified in the Merger Agreement. DOJ’s message to Sinclair could not have been clearer: if Sinclair agreed to sales in those ten markets, “We would be done.”

 

12. DOJ’s demand was neither unexpected nor draconian – it overlapped entirely with what Sinclair had already committed to do in the Merger Agreement. Yet Sinclair refused, deciding instead to antagonize DOJ officials, including by accusing the Assistant Attorney General of the Antitrust Division – the highest ranking official in that division – of “completely misunderstand[ing]” the broadcast industry and being “more regulatory” than any recent predecessor. In meetings with DOJ, Sinclair invited litigation over station divestitures, summarizing its position to DOJ in two words: “sue me.” Indeed, Sinclair went so far as to threaten to file its own lawsuit against DOJ. This was the polar opposite of what Sinclair had promised under the Merger Agreement when it agreed to proffer the identified station divestitures to avoid even a threat of litigation with regulators.

 

13. Tribune warned Sinclair repeatedly over many months that its refusal of DOJ’s demands constituted a breach of its obligations under the Merger Agreement. Sinclair repeatedly ignored Tribune’s admonitions and refused even to respond substantively. When, following what was supposed to have been the parties’ final front office meeting with DOJ in late January, Tribune again pressed Sinclair to agree to the divestitures identified in the Merger Agreement and demanded by DOJ, Sinclair told Tribune it would have to sue to get Sinclair to agree to those sales. It was not until mid-February 2018, when Tribune made clear that it was on the eve of filing precisely such a suit, that Sinclair finally told DOJ that it would eventually agree to divest stations in the ten markets if necessary, but that it intended to continue to negotiate over certain of those stations. Not surprisingly given its conduct up to that point, Sinclair nevertheless kept right on haggling with DOJ over the divestiture of a subset of stations.

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This FCC has been given a clear definition of “good dereg” (Raycom-Gray) vs. “bad dereg” (Sinclair-Tribune) that they’d be nuts not to address. It’s only a matter of when they do it.

 

Raycom-Gray would have been perfectly acceptable even under 2016 rules. It doesn't even come close to the cap.

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I don't think they can sit it out.

 

You have to suit-up if you want to play the game.

 

Just how big a "hit" can Sinclair take...and still "try" to play the game.

 

Cuz you ain't seen nothing yet.

 

Sinclair can sit out fine. They've what, gobbled up 5 or 6 corporations within the last decade? They own 192 TV stations, the most in the country. They're playing the game fine and they're winning. No one else except Nexstar can hope to reach their level.

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Apparently, Sinclair did not want to have to divest anything and wanted the DOJ to sue them to force divestitures, and they also threatened to sue the DOJ! This led to Tribune threatening to filing a suit against Sinclair in February for breaching its obligations under the merger agreement. It was then that Sinclair agreed to the divestitures, and even then they still wanted to get the DOJ to change its mind about certain stations.

 

That tells you just how much of a diva Smith and company have been this whole time.https://www.youtube.com/watch?v=rNM5HW13_O8

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Sinclair can sit out fine. They've what, gobbled up 5 or 6 corporations within the last decade? They own 192 TV stations, the most in the country. They're playing the game fine and they're winning. No one else except Nexstar can hope to reach their level.

 

They’re winning because they’re doping.

 

Much like in real sports, get caught, and you could be banned for life.

 

Question at this point is whether Sinclair only had a little PED in its system, or the whole pharmacy.

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Raycom-Gray would have been perfectly acceptable even under 2016 rules. It doesn't even come close to the cap.

I’m talking more about how you play the game. Raycom-Gray did what they needed to do right off the gate by saying “we’re going to sell X” and being 100% transparent.

 

Sinclair’s long had the issue of not being transparent and wanting to retain as much as possible in their transactions. By continuing this ethically problematic trend with the Tribune deal, they failed to not only get the “big three” of WGN, WPIX and KTLA and a cable channel with nationwide clearance ... they also now have the prospect of a very messy legal entanglement with Tribune**.

 

For sure, Sinclair will be back as a buyer. Probably sooner than later. But they need to change how they do things, as the way they have been doing things is starting to come with a hefty price tag.

 

**If Sinclair is smart, they’ll find some way to settle out of court. They have to, a billion dollars is a goddam lot of money.

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