ARI SHAPIRO, HOST:
Tribune Media has pulled the plug on its planned merger with Sinclair Broadcast Group. The nearly $4 billion deal looked like it had a good chance of being approved by regulators when it was first announced in the spring of last year. But in a lawsuit filed today, Tribune claimed that Sinclair's misconduct had torpedoed the deal. Joining us now is NPR media correspondent David Folkenflik. Hi, David.
DAVID FOLKENFLIK, BYLINE: Hey, Ari.
SHAPIRO: This is a real turnaround from a proposed merger to now one party suing the other. What blew this deal up?
FOLKENFLIK: So it was an epic U-turn. And what was interesting was that the deal seemed to be blessed by the top regulator in this issue. That's Ajit Pai. He's the chairman of the Federal Communications Commission. And he had rewritten and reinstituted rules to such a degree that it appeared to brush away all the obstacles to Sinclair to be able to acquire all these other stations, pending the sale of several stations. The interesting thing is the way in which Sinclair structured the sale of several of these stations seemed to throw the whole thing into doubt. And that is it seemed to be selling a couple of these stations to companies that it either effectively controlled or strongly influenced.
SHAPIRO: So kind of a selling in name only?
FOLKENFLIK: Kind of selling in name only - and that was something that even Ajit Pai, the chairman, found he couldn't swallow. He pointed to those deals and questioned the integrity of some of Sinclair's statements and claims. In addition, it's worth pointing out that Ajit Pai himself is under investigation by the independent inspector general of his own agency for the way in which he handled the front end of this - in which he tried to make it easier for Sinclair to do this. So that's part of the context and background in which Pai made his decisions.
SHAPIRO: Now, Sinclair owns or controls 190 TV stations around the country - mostly mid-sized and smaller markets. Tribune has 42 stations in mostly big cities. Is that why a lot of analysts thought this was going to work?
FOLKENFLIK: There are analysts who felt like - as though this would be a great way for Sinclair to expand, to get a bigger footprint in some of the nation's top markets - New York, Los Angeles, Chicago, Texas in particular - although some of these stations were to be sold. So that's fine. It certainly is a way in which there could be this incredible continuing consolidation and a way for Sinclair to create effectively a television network - and a fairly conservative one at that - from the ground up rather than from top down.
SHAPIRO: There was a conference call yesterday where Sinclair executives said they were working with Tribune on the best approach to get the deal approved. Then just 24 hours later, it blows up - sounds like these two weren't communicating well at all.
FOLKENFLIK: It's the way that song goes. Put on a happy face. I think Sinclair was hoping against hope that Tribune wouldn't scotch the deal. I do think the lawsuit comes as something of a surprise to everybody concerned. It shows the animosity and the way in which Tribune is trying to distance itself from representations that the head of the FCC now says he feels may have been dishonest and disingenuous.
SHAPIRO: Is this the end of it? Or is there any chance of resurrecting the deal in one form or another?
FOLKENFLIK: Well, if Tribune hadn't made this announcement this morning, it was going to be heard by an administrative law judge, which meant that it would have been subject to a very lengthy bureaucratic procedure to try to get a federal OK. At this point, it's either going to be resolved in court or tossed out. Or there's going to be some money that changes hands to, you know, make Tribune whole, as it were. But ultimately this outcome is a strong slap in the face to Sinclair, which had expected I think to get a pretty warm embrace from the Trump administration.
SHAPIRO: That's NPR media correspondent David Folkenflik. Thanks, David.
FOLKENFLIK: You bet. Transcript provided by NPR, Copyright NPR.
