Sinclair Says Tribune Breach of Contract Lawsuit Settled With Station Sale, $60 Million Payout to Nexstar
Sinclair will sell Nexstar a station and pay $60 million as part of an agreed “resolution” to a 2018 breach of contract lawsuit Tribune filed against Sinclair in the wake of the scuttled Sinclair/Tribune deal, a Sinclair spokesperson said Monday.…
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Nexstar bought Tribune in 2019, but the lawsuit continued in Delaware Chancery Court (see 1808150056). According to an 8-K form Sinclair filed with the SEC Monday, the lawsuit will be dismissed with prejudice as part of the settlement. "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." Nexstar filed a similar 8-K Monday as well. Along with the $60 million payment to Nexstar, Sinclair will sell the license of WDKY-TV Lexington, Kentucky, to Nexstar, plus non-license assets of KGBT-TV Harlingen, Texas. “Sinclair and Nexstar have also modified an existing agreement regarding carriage of certain of Sinclair’s digital networks by stations acquired by Nexstar in connection with the Tribune acquisition,” said the Sinclair spokesperson in an email. In the initial breach of contract filing in 2018, Tribune had sought $1 billion in damages over the failed deal. Attorneys told Communications Daily then that a settlement for a much smaller number was the likely outcome. Tribune blamed the Sinclair transaction’s failure on Sinclair’s contentious negotiations with the FCC and DOJ. “Sinclair invited litigation over station divestitures, summarizing its position to DOJ in two words: ‘sue me,’” the lawsuit’s initial complaint said. Sinclair filed a counterclaim arguing Tribune was involved in those negotiations and violated agreements by backing out of the deal after the FCC designated it for hearing. Sinclair’s licenses are up for renewal in 2020, and several attorneys have said they expect the questions about the company’s candor raised in the FCC hearing designation order to come up again during that process.