Sinclair is the nation's largest local broadcaster, reaching about 4 in 10 US households through TV stations.
In the lawsuit filed Thursday in Delaware Chancery Court, Tribune Media alleges Sinclair breached its contractual obligations "in spectacular fashion" in a bid to maintain control of WGN-TV and other stations.
"We're obviously disappointed", Tribune CEO Peter Kern said on a conference call Thursday morning. "Unfortunately, Sinclair chose to follow a regulatory strategy reflecting its own self-interest, rather than its contractual obligations".
The Federal Communications Commission (FCC) said in July that Sinclair "did not fully disclose" facts about the merger, raising questions about whether the company 'attempted to skirt the commission's broadcast ownership rules'. Sinclair agreed to sell off a number of stations to comply with the FCC's national ownership cap, which prohibits a single entity from reaching more than 39 percent of TV households.
Reporters at stations owned by Sinclair - which include almost 200 local affiliate news channels across the country branded as ABC, CBS, NBC, Fox, and more - have been forced to run segments that attack Democratic politicians, discredit the FBI's investigation of Russian Federation, call other media outlets "false news", and even run a regular commentary show by a former Trump adviser. "Accordingly, we have exercised our right to terminate the Merger Agreement, and, by way of our lawsuit, intend to hold Sinclair accountable".
The deal's termination, which scuppers Sinclair's efforts to dramatically expand, comes after criticism by Democrats and public advocacy groups over whether the merger was in the public interest. Last month, the FCC voted unanimously to subject the merger to an administrative law proceeding, a taxing and time-consuming process that was expected to kill the deal.
According to Tribune, Sinclair's entire course of conduct has been in blatant violation of the merger agreement and without Sinclair's actions the transaction could have closed long ago.
Odds may have seemed to favor Sinclair partly because of the broadcaster's conservative leanings and Sinclair Chairman David Smith's meetings with President Donald Trump. When the FCC shelved the deal, Trump said it was "So sad and unfair" that the agency in his administration wouldn't give its approval.
'This uncertainty and delay would be detrimental to our company and our shareholders'.
Tribune formally shut down the deal on the same day it announced its quarterly earnings. By one estimate, the combined company would have owned stations in almost 3 out of 4 USA households, controlling an enormous amount of the content Americans see on local stations.