"The collapse of the merger is great news for dozens of local communities that will be spared Sinclair's slanted coverage and ridiculous must-runs.", said Craig Aaron, CEO of Free Press, referring to commentary segments produced at the corporate level that Sinclair requires its stations to broadcast.
The $3.9 billion acquisition was announced in May after Sinclair won the rights to Tribune Media at auction, which would have given Sinclair ownership or control of television stations in 72 percent of USA markets, including majors like New York City, Chicago and Miami.
The media merger hit the rocks on July 16, when Federal Communications Commission Chairman Ajit Pai said he had "serious concerns" about the merger because Sinclair's plan to divest some stations might not satisfy federal laws. "This uncertainty and delay would be detrimental to our company and our shareholders. and, by way of our lawsuit, intend to hold Sinclair accountable".
The Tribune Group on Thursday accused Sinclair of acting in bad faith and adopting an "unnecessarily aggressive" attitude toward regulators, and said it was taking Sinclair to court for breaching the agreement.
The company was admonished by media watchdogs in April after dozens of Sinclair news anchors read an identical script expressing concern about "one-sided news stories plaguing the country".
The Federal Communications Commission (FCC) was initially seen as favoring the union, which had the blessing of the Trump administration.
The Sinclair-Tribune mega-merger appears to be dead.
Tribune "warned Sinclair repeatedly over many months" that its refusal to comply with required station divestitures was a breach of contract, according to the lawsuit, which seeks to recover at least $1 billion in damages.
Kern told employees in an email reviewed by Reuters that it was not clear what was next for Tribune.
The FCC did not immediately comment on Thursday.
Sinclair also had planned to sell stations in Dallas and Houston to Cunningham Broadcasting Corp, a company controlled by the estate of Smith's mother.
Under the terms of the deal, Tribune and Sinclair had the right to call off the merger without paying a termination fee if it was not completed by August 8.
On Wednesday, Sinclair said it remained in discussions with Tribune about how to secure FCC approval of the deal, which has drawn wide-ranging criticism from across the political spectrum for how it would give the company access to so much of the nation's broadcast market.
Had the merger with Tribune Media been approved, Sinclair would have completely dominated the local news market.