Sinclair Broadcast Group has settled its lawsuit from Tribune Media, stemming from the two companies’ failed $3.9 billion merger in 2018.
Under the terms of the settlement, Sinclair will pay Nexstar, which ended up buying Tribune in 2019, $60 million, and will transfer control of the WDKY station that serves the Lexington, Kentucky market. Sinclair and Nexstar also “modified an existing agreement regarding carriage of certain of the Company’s digital networks by stations acquired by Nexstar in connection with the Tribune acquisition,” according to an SEC filing on Monday.
Tribune, which first agreed to a $3.9 billion sale to Sinclair in 2017, terminated the agreement a year later and sued Sinclair for breach of contract. Tribune accused Sinclair of engaging in unnecessarily aggressive and protracted negotiations with the Department of Justice and the FCC over regulatory requirements, refusing to sell stations in the markets as required to obtain approval, and proposing aggressive divestment structures and related-party sales that were either rejected outright or posed a high risk of rejection and delay.
The Chicago-based media company filed the lawsuit in the Delaware Chancery Court, seeking compensation for all losses incurred as a result of Sinclair’s material breaches of the merger. Sinclair then countersued Tribune, saying the company had “breached its obligations under the Merger Agreement to exercise its own reasonable best efforts to close the Transaction.”
“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,” the companies continued in the filing.
Nexstar ended up buying Tribune for $4.1 billion. The deal closed in 2019.