Tribune pulled out of the merger in August 2018 after the Federal Communications Commission sent the merger for review by an FCC administrative hearing judge. That review was sought in the wake of FCC Commissioner Ajit Pai raising “serious concerns” about the deal being in the public interest.
In the settlement, the company, its board and CEO Chris Ripley agreed their insurers will pay $20.5 million into a settlement fund. After a deduction for an award of fees and expenses to the plaintiffs’ attorney, $5 million in the settlement fund will pay over a five year period for new corporate governance measures and compliance programs at Sinclair to meet an FCC consent decree. The remaining balance will be paid to Sinclair.
In addition, David D. Smith, Sinclair’s executive chairman, will forgo, cancel, or return a grant of 638,298 shares of Sinclair Class A common stock that was awarded to him as part of compensation in February 2020 and valued at $4.36 million.
Sinclair did not admit liability or wrongdoing and said it agreed to the settlement to avoid costs, risks and distraction of continued litigation.
The defendants also agreed to put a series of corporate governance measures in place, such as establishing a committee to oversee responsibility for broadcast-related regulatory and compliance issues. They also will make changes to Sinclair’s ethics policy and policies concerning related-party transactions.
The parties had reached a preliminary agreement on July 20. The U.S. District Court in Maryland approved the settlement on Aug. 6. The lawsuits will be dismissed, subject to final court approval to be considered at an Oct. 27 hearing.