Tribune Media has withdrawn from a $3.9 billion merger with Sinclair Broadcast Group and is now poised to sue for breach of contract over failed negotiations with regulators. Last year, Sinclair announced the merger, which would’ve been the biggest acquisition in its history. The merger began to unravel when the Federal Communications Commission raised serious concerns about the business deal, however.

When the merger was announced, it was set to create a conservative broadcasting giant that would’ve controlled 233 stations in 108 markets across the country. This would have made it the biggest television company in America by entering 70% of U.S households, and signaled a major victory for conservative media.

In July, the FCC announced that it had “serious concerns” regarding the proposal and that the merger warranted a closer look by an administrative law judge. This immediately raised red flags amongest investors, as it looked like the FCC was set to block the deal.

The reason for concern?

In order to comply with the national cap, Sinclair needed to divest from stations completely. The FCC learned, however, that Sinclair was going to spin off a number of stations in Dallas, Houston, and Chicago to buyers that were too close to the company’s leadership.

Tribune Media terminated its merger agreement with Sinclair and charged the broadcasting company with breach of contract. They allege that Sinclair refused to sell broadcasting stations in certain markets, which was required by law to obtain approval for the merger. In addition, the lawsuit states that Sinclair was going to engage in related-party sales that posed a high risk of rejection by the FCC, which would’ve delayed the merger.

Understanding Breach of Contract in Business Litigation

Business litigation often arises when there is a dispute during a business transaction, such as a merger or an acquisition. While many of these cases are resolved through mediation, litigation is necessary in some cases. When businesses have disputes with other businesses, it is most often related to breach of contract. By definition, breach of contract is the act of breaking the terms of a contract. When a breach of contract occurs, it is important to retain the services of an experienced Texas business litigation attorney to protect your legal rights.

When a business or individual breaches a contract, you are entitled to relief under the law and may be able to file a lawsuit to seek damages, including:

    • Compensatory Damages – These are damages that compensate the non-breaching party for the financial losses they suffered because of the breach of contract.
    • Punitive Damages – These are damages that seek to punish the wrongful party, and are usually only awarded in very egregious situations.
    • Nominal Damages – These are damages that are awarded when a breach of contract has occurred, but no actual money loss occurred to the wronged party.
  • Liquidated Damages – These are specific damages that were outlined in the contract itself. Some contracts include a list of damages that would be awarded should a breach of contract occur.

Contact Our Experienced Texas Business Litigation Attorneys

If you’re involved in a breach of contract dispute, you need a Texas business litigation attorney on your side from the very start. At David K. Wilson & Associates, we know that businesses need a law firm with the resources and skills needed to tackle these complex cases. Our attorneys are seasoned litigators who can help protect your rights after a breach of contract has occurred. Contact our law firm today at (903) 870-9050 or fill out our confidential contact form and someone will call you back.

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