08.28.2008 07:27 PM
DOJ Files Suit Against Raycom
The U.S. Department of Justice has filed a civil lawsuit today against Raycom Media of Montgomery, Ala., because the company failed to sell a TV station in Richmond, Va. Raycom was required to sell a station as part of a deal it cut with the DOJ when the media company acquired WWBT-TV from Lincoln Financial Media last April.
Raycom had cut a deal to sell WTVR-TV in Richmond to Sinclair (NASDAQ: SBGI) of suburban Baltimore, but the DOJ nixed the sale yesterday because Sinclair operates another of the top four stations in the market. Sinclair had already sold the station, WRLH-TV, to Carma Broadcasting, and had planned to buy WTVR for $85 million. However, the DOJ kyboshed the sale because its consent decree with Raycom involves diversifying control of the ad revenue in the market.
Sinclair said it would continue “to explore its rights under its asset purchase agreement with Raycom.”
Raycom was subsequently stuck with WTVR and must either sell it or comply with a settlement proposed by the DOJ.