Tribune "warned Sinclair repeatedly over many months" that its refusal to comply with required station divestitures was a breach of contract, according to the lawsuit, which seeks to recover at least $1 billion in damages. The company already owned 173 stations in 81 markets.
"Our merger can not be completed within an acceptable timeframe, if ever", said Tribune CEO Peter Kern in a statement. The company, the largest owner of local television stations in the United States, has drawn attention recently for repeating claims by U.S President Donald Trump that traditional television and print publications offer "fake" or biased news.
It also means an uncertain future for Chicago-based Tribune Media after 15 months of preparing to be taken over by Sinclair. And the sales allegedly had strings attached that would allow Sinclair to retain significant control over the stations' operations and programming. In addition, Tribune said, Sinclair outright refused to sell station in some markets.
Sinclair "committed to use its reasonable best efforts to obtain regulatory approval as promptly as possible", Tribune said in a statement, but instead "in an effort to maintain control over stations it was obligated to sell, [it] engaged in unnecessarily aggressive and protracted negotiations with [federal regulators]". "Accordingly, we have exercised our right to terminate the Merger Agreement, and, by way of our lawsuit, intend to hold Sinclair accountable", said Tribune CEO Peter Kern in the release.
In a surprise move in July, however, Pai said he had "serious concerns" and suggested Sinclair was trying to hide anticompetitive practices in its proposed purchase and divestiture of certain stations.
Sinclair did not immediately comment on Thursday, but said last month 'at no time have we withheld information or misled the FCC in any manner whatsoever'. 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.
The American Cable Association (ACA), which represents small- and medium-sized cable companies, also cheered Tribune's decision.
The two companies had until midnight Wednesday to call off their deal.
It was admonished by media watchdogs in April after dozens of Sinclair news anchors read an identical script expressing concern about "one-sided news stories plaguing the country".
Sinclair is the nation's largest local broadcaster, reaching about 4 in 10 US households through TV stations.