A US Appeals court gave the ruling that Sinclair was looking for. But, it likely makes no difference now.
The U.S. appeals court rejected on technical grounds a challenge to Federal Communications Commission ownership rules know as the "UHF Discount."
It was the path that Sinclair was hoping to use to buy Tribune.
The Washington-based court on Wednesday dismissed a lawsuit from opponents without considering its merits, ruling the activist groups that filed it hadn’t shown they would be injured by the consolidation at the heart of their case.
Bloomberg writes that while that decision preserves headroom for broadcast mergers, it may have arrived to late for Sinclair’s $3.9 billion acquisition of Tribune -- though could help other suitors for the Chicago-based broadcaster.
“This decision won’t likely breathe new life into Sinclair’s Tribune deal.” said Matthew Schettenhelm, an analyst for Bloomberg Intelligence. “Tribune can walk away from the deal on August 8 -- and it likely will. After this decision, Sinclair still faces a risky and uncertain FCC hearing, while other potential Tribune suitors gain more flexibility to make offers.”
“The court’s decision clears up a secondary problem for Sinclair -- can it fit under the U.S. ownership cap?” Schettenhelm said. “But it does nothing to let the company clear the stumbling block that emerged last week, the FCC decision to call for a hearing on if Sinclair acted with full candor.”
While this would have been a huge win for Sinclair, it is like putting whip cream on a pile of dirt as the Sinclair/Tribune deal is more than likely dead.
But, it does mean that another company can buy Tribune and not worry as much about the ownership cap.
Tribune's stock price rose on the news.