Broadcast station deal volumes reached $657.8 million in Q3, fueled mainly by spinoffs from larger deals, according to S&P Global Market Intelligence media research group Kagan.

According to Kagan, Gray Television’s $3.6 billion purchase of Raycom Media created overlaps in nine markets, and in August Gray sold nine stations to four different buyers for a combined $235.5 million. Three of these transactions represent the quarter's three top TV deals: TEGNA Inc. bought two stations for $105 million, Lockwood Broadcast Group acquired four stations for $67 million and E.W. Scripps paid $55 million for two stations plus one Class-A station.

Kagan added that Raycom bought the licenses of two stations, which it had operated under shared services agreements, from two license owners for $16.77 million. Nexstar Media Group Inc. purchased the license of KRBK in the Springfield, Mo., market from Koplar Communications for $16.45 million. Nexstar was already operating the station under a local marketing agreement.

Related: Tribune Terminates Sinclair Deal 

Kagan added that it has revised its Q2 2018 deal volume estimates to account for the cancelled Sinclair/Tribune merger. Kagan had estimated in July that the spinoffs from that merger alone would amount to about $1.48 billion. The deal was scrapped in August after federal regulators recommended an administrative law judge review the deal. Kagan revised its records for the quarter and and now estimated that Q2 2018 TV deal volume was about $3.55 billion.

The early consensus after Tribune Media terminated its $3.9 billion merger with Sinclair Broadcast Group is probably what most would have expected – most industry groups are happy that the deal, which would have created a powerful and conservative voice in American Broadcasting, is officially dead.

That the deal, which early on in the process was expected to cruise through the approval process – President Donald Trump himself was a big cheerleader for the merger – ended up on the cutting room floor is a bit of a surprise. But anyone who has been keeping a n eye on recent developments could probably see the handwriting on the wall.

“The decision by Tribune not renew its merger transaction with Sinclair ends a merger that posed serious risks for diverse and balanced news in America’s heartland,” said NewsMax CEO Christopher Ruddy in a statement. “When NewsMax began its opposition to this merger, we were told it was virtually ‘guaranteed’ and could not be stopped. I like taking on hopeless causes, especially when I believe the facts and good sense argue for such a cause. Tribune’s statement today withdrawing from the merger confirms what NewsMax and others have been saying: Sinclair had failed to respect the regulatory review process and the rule of law, as it relates to market concentration and media ownership.”

President Trump has been a big fan of Sinclair during his term in office, defending the company’s conservative stance in contrast to what he calls liberal-slanting “fake news.” 

When FCC chair Ajit Pai and the DOJ expressed some concerns last month with the merger, Trump tweeted that while liberal media outlets have been allowed to get bigger, that wasn’t the case for conservative voices like Sinclair’s.

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The cable industry has been against the deal since its inception, claiming that the combined company would exert tremendous power on the retransmission consent front, with more than 200 stations covering more than 70% of U.S. television households. But most operators, who maybe are keeping in mind that they will still have retrans negotiations with Sinclair in the future, decided to keep quiet on the deal’s failure.

America Cable Association CEO Matt Polka, who has been cable’s voice against the merger since the beginning, said the

“Tribune's decision to pull the plug on the Sinclair merger is great news for consumers who will avoid paying the higher pay-TV rates the deal would have caused," Polka said in a statement. "It is especially great news for those consumers served by smaller video providers that have been victimized in the past by outrageous retransmission consent fee hikes and scurrilous signal blackouts by large corporate broadcasters.

Polka also took to Twitter to express some surprise at Tribune’s decision to sue Sinclair over the deal, tweeting that the suit was “incredibly ironic.”

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At the American Civil Liberties Union, which came out early against the merger, the credit was given to individual citizens who came out in numbers to oppose the deal.

“The Sinclair deal would have trampled on First Amendment principles, crippled the future of journalism, and disproportionately harmed communities of color,” The ACLU said in a statement. “But thousands of activists raised their voices — and it worked.”

[embed]https://twitter.com/ACLU/status/1027555551297847300[/embed]

Legislators also came out to support Tribune’s decision.

Sen. Tom Udall (D-NM) tweeted that the termination is good news for consumers that depend on reliable news sources.

“The termination of the Sinclair-Tribune merger is good news for people who depend on reliable local news to stay informed. Proud to have worked with @SenatorCantwell & countless Americans who spoke up & helped stop this unprecedented corporate consolidation of local broadcasting.”

[embed]https://twitter.com/SenatorTomUdall/status/1027569469739200513[/embed]

For Sen. Richard Blumenthal (D-Conn.), reaction was short and sweet.

[embed]https://twitter.com/SenBlumenthal/status/1027604674881277952[/embed]

Tribune Media said in court filings Thursday that its merger path over the past 12 months with Sinclair Broadcast Group was bloodied not by regulatory pressure but by its partner's hubris, and is seeking $1 billion in damages to help heal its wounds.

Tribune officially terminated its $3.9 billion merger with Sinclair on Thursday. In a lawsuit filed in Delaware Chancery Court the same day, Tribune said Sinclair repeatedly failed to disclose key information from it and regulators, a practice which helped torpedo the deal.

According to the suit, the deal would have likely been approved months ago if Sinclair had only agreed to divest of stations in 10 overlap markets earmarked by the U.S. Department of Justice and presented clean station sales to the Federal Communications Commission to adhere to the federal broadcast ownership cap. Instead the company, according to Tribune, focused on deals that would greatly benefit Sinclair and only added to the deal’s regulatory onus.

Officials at Sinclair did not return requests for comment.

“Although staff members at DOJ and the FCC laid out a clear path for clearance of the Merger, Sinclair ignored their repeated statements of what was required for approval,” Tribune said in the filing. “Instead, Sinclair defiantly (and unsuccessfully) attempted to obtain clearance on better terms for itself, regardless of how long that took or whether it risked failing to obtain approval of the Merger.”

Sinclair made several proposals to divest stations and appease the agency, but it was a plan to sell two Texas stations – WDAK in Dallas and KIAH in Houston – and WGN in Chicago, that seemed to be the last straw for the government. FCC chairman Ajit Pai said those divestitures, to entities that had close ties to Sinclair, could represent possible sham transactions, and called for a hearing before an administrative law judge to look into the matter. In past merger reviews, such moves usually meant the deal was destined for the scrap heap.

Related: Pai: Sinclair-Tribune Decision Made Based on Facts, Law 

Tribune said Sinclair never informed it nor the government that the proposed buyer of the three stations – Cunningham Communications – was owned by a car dealer Steven Fader who’s biggest shareholder was Sinclair chairman David Smith. Nor did the broadcaster disclose that a controlling interest in Cunningham’s had been sold at a “suspiciously low price” to a Sinclair associate with re-purchase options held by Smith’s family members.

Those revelations came only out during public comments on the merger. Tribune said Sinclair never revealed it to its merger partner or the federal government.

Sinclair later pulled those sales -- opting to keep WGN and place the Texas stations in a trust for later sale -- but offered no other remedies, the suit claims.  

According to the suit, the 10 markets DOJ considered to be overlap areas – including Seattle, St. Louis and Salt Lake City – were properties Sinclair had already considered selling as part of the merger deal.

“Yet Sinclair refused, deciding instead to antagonize DOJ officials, including by accusing the Assistant Attorney General of the Antitrust Division — the highest ranking official in that division — of ‘completely misunderstand[ing]’ the broadcast industry and being ‘more regulatory’ than any recent predecessor,” the suit said.

And that goading only increased in later meetings with DOJ officials, the suit said.

“Sinclair invited litigation over station divestitures, summarizing its position to DOJ in two words: ‘sue me.’”

Now the broadcaster will have to weather being the sue-ee instead of the sue-er. 

Tribune Media snuffed out its merger deal with Sinclair Broadcasting, terminating the deal Thursday and simultaneously filing suit in Delaware Chancery Court claiming Sinclair breached its contract.

Tribune is seeking $1 billion in damages, according to the suit.

The termination ends what has been a year-long journey for both companies. Sinclair announced the $3.9 billion deal in May 2017. The combination would have made Sinclair, already the largest TV station group in the country even more powerful, with more than 200 stations and covering over 70% of the country. But it was that bulk that ultimately did the deal in. 

The Federal Communications Commission was in the process of scheduling hearings into a Sinclair proposal to divest three stations to entities it would ultimately control, which the agency called possible sham transactions. Sinclair later said it would place two of those stations in a trust for later sale to third parties, and decided to keep the other – WGN in Chicago – as part of the deal.

Related: FCC: Sinclair-Tribune Deal as Proposed is Not in Public Interest

Tribune’s decision to scrap the merger comes as a bit of a surprise. Yesterday, in its Q2 earnings conference call, Sinclair said it was continuing talks with Tribune to work out a deal. The deadline to close the transaction was Aug. 8, but it appeared that the two could extend that date to work out an agreement.

That apparently wasn’t in the cards.

In a statement, Tribune said although Sinclair had pledged to use its “reasonable best efforts to obtain regulatory approval as promptly as possible,” instead it engaged in an “unnecessary and aggressive” battle with regulators over station divestitures, refused to sell stations in certain markets and created aggressive divestiture structures and third-party sales that either were rejected or posed a high risk of rejection by regulators.

“In light of the FCC’s unanimous decision, referring the issue of Sinclair’s conduct for a hearing before an administrative law judge, our merger cannot be completed within an acceptable timeframe, if ever,” Tribune Media CEO Peter Kern said in a statement. “This uncertainty and delay would be detrimental to our company and our shareholders. Accordingly, we have exercised our right to terminate the Merger Agreement, and, by way of our lawsuit, intend to hold Sinclair accountable.”

Sinclair officials did not return requests for comment.

The termination could mean that Tribune is back in play, and several other station groups have been aggressively adding properties through deals in recent months, including Gray TV, and Nexstar Broadcasting Group. 

“This morning’s course of action should not be a surprise to investors who have been following the saga, but clearly the prospect of Tribune agreeing to see the administrative hearing process through (presumably in exchange for some form of ‘sweetener’ from Sinclair) is off the table and Tribune begins the next chapter of its history as a standalone entity (for how long, remains unclear),” said Evercore ISI broadcast analyst David Joyce in a note to clients.

In a statement, Free Press CEO Craig Aaron said the termination was good for consumers.

“The collapse of the merger is great news for dozens of local communities that will be spared Sinclair’s slanted coverage and ridiculous must-runs," Aaron said in a statement. "For years, Sinclair has been a dishonest broker at the FCC, using fuzzy math and sketchy shell companies to evade the agency’s rules and expand its empire. Its history of deceit and arrogant approach to the agency finally caught up with Sinclair. The broadcast giant's double-dealing became too much for Tribune executives to bear. As details of Sinclair’s deceptions emerge — and with other investigations underway a the Department of Justice — it’s reasonable to question whether the broadcaster deserves to hold any licenses to profit off the public airwaves.

“Hopefully, FCC opposition to this deal is the start of a trend in favor of more independent voices and local choices for news," Aaron continued. "The FCC majority’s recent gutting of media ownership limits suggests otherwise. The demise of this deal presents an opportunity to embark on a new path, an opportunity that will be squandered if these stations were to be simply served up to other giant conglomerates.”

Other consumer and trade groups were equally pleased with the outcome.

American Cable Association CEO Matt Polka said the termination is god news for cable operators as well as consumers.

"Tribune's decision to pull the plug on the Sinclair merger is great news for consumers who will avoid paying the higher pay-TV rates the deal would have caused," Polka said in a statement. "It is especially great news for those consumers served by smaller video providers that have been victimized in the past by outrageous retransmission consent fee hikes and scurrilous signal blackouts by large corporate broadcasters.

"All along, ACA insisted that the proposed Sinclair-Tribune deal would result in harm to the public stemming from higher retrans fees and higher consumer prices," Polka continued. "Sinclair's illusory 'sales' served only to magnify these harms. Few predicted the collapse of the Sinclair-Tribune deal when it was first announced. ACA is pleased that others joined us in refusing to yield to conventional wisdom and continuing to challenge an obvious attempt by Sinclair to subordinate the public interest to its quest to obtain TV station ownership hegemony."

At Common Cause, former FCC commissioner and special adviser to the consumer group Michael Copps said the demise of the deal  was due in large part to grass roots efforts to block it.

“Good riddance to a really bad deal that would have given Sinclair an unprecedented amount of control of our local media. Broadcasters are supposed to serve the needs of the communities where they operate," Copps said in a statement. "But Sinclair has shown its only interest is taking over as many local stations as possible to become a national network at the expense of local programming and diverse viewpoints. In the end there was massive opposition from all sides, which demonstrated Sinclair’s merger was clearly not in the public interest.

"The strongest impact came at the grassroots level. Hundreds of thousands of people, including over 50,000 Common Cause members, called on the FCC to block Sinclair’s merger," Copps continued. "It’s their victory and shows Americans want a media system that promotes local, diverse, and independent journalism. But Sinclair will be back with more deals, as will other media giants. At a time when we need more independent and diverse voices in our media, we must all stay vigilant and engaged.”