Thwarted in his bid to buy Tegna by an overlong and deal-breaking FCC review process, Soo Kim (and his right hand Deb McDermott) is indeed a victim of prejudice and discrimination. Only it’s probably not the sort you may think.
With Standard General’s deal to buy Tegna hanging by a thread, the broadcaster may continue on its pre-deal trajectory or be sold in pieces, analysts say. But the FCC’s glacial review process, which may have been triggered by private equity’s role in the deal, has had a chilling impact on other potential large transactions in the industry. Note: This story is available to TVNewsCheck Premium members only. If you would like to upgrade your free TVNewsCheck membership to Premium now, you can visit your Member Home Page, available when you log in at the very top right corner of the site or in the Stay Connected Box that appears in the right column of virtually every page on the site. If you don’t see Member Home, you will need to click Log In or Subscribe.
Even before the U.S. Court of Appeals for the D.C. Circuit denied Standard General’s petition to force the FCC to vote on its proposed $8.6 billion acquisition of Tegna, company founder Soo Kim knew his last-ditch legal maneuvers were a long shot. Nevertheless, Kim seemed disappointed, frustrated and chagrined that the deal appears likely to die when the financing he assembled expires on May 22.
Soo Kim, managing partner of Standard General, calls the FCC Media Bureau’s decision to refer his company’s proposed $1.6 billion acquisition of Tegna to review by an administrative law judge an “unaccountable power grab.”
The FCC chairwoman doesn’t see (or doesn’t care) that by weakening retrans, she is chipping away at the viability of the station business and a “cornerstone” of the agency’s longstanding broadcast policy: localism.
Standard General, whose proposed $8.6 billion acquisition of Tegna has been tied up in a review by the FCC for more than a year, is calling on the full FCC to vote on approving the transaction immediately rather than delaying the deal further.
Regulatory hurdles, opposition, continue to thwart deal closure. Kim reiterates his reasons for urging approval before a Feb. 22 fee kicks in, saying Standard General is committed to not reducing staffing at any of the stations it’s acquiring for at least two years as well as increasing local news production in those markets.
Standard General managing partner Soo Kim has asked to meet with Sen. Elizabeth Warren after the legislator wrote to FCC Chairwoman Jessica Rosenworcel last week asking the FCC to block Standard General’s proposed purchase of Tegna assets for north of $8 billion.
Standard General’s long-haul effort to get FCC approval for its proposed purchase of Tegna and its TV stations is getting ugly. Soo Kim, founding partner of Standard General, hit back hard at critics in a press release today, Monday (Oct. 17). Standard General said it was responding to “fact-free” and “repeated ad hominem attacks,” calling out criticisms from representatives of The NewsGuild-CWA, the union that has petitioned to block the deal, and saying they were racially charged and sexist.
He maintains that Apollo Global Management will have no role in running the combined company, following the $5.4 billion merger with Tegna.
Standard Media CEO Deb McDermott (r) says she has a track record running TV stations. So does Soo Kim, founder and managing partner of Standard General, which agreed to acquire Tegna for $5.4 billion. While the deal is being reviewed by the FCC, objections have been raised by Graham Media, unions and other groups concerned that newsroom jobs will be lost and about the influence of Apollo Global Management, which owns stations through Cox Media Group and is involved in the financing of Standard General’s bid.
“One of our key initiatives is to give our communities a voice,” says Soo Kim (l), founding partner of Standard General and current managing partner and chief investment officer. “We want to partner with community journalism groups to amplify the work they’re doing and the communities they represent.” The merged company will be led by television industry veteran Deb McDermott, forming America’s largest minority-owned, women-led broadcasting company.
Change is coming to Tegna. Standard General, which won a drawn-out auction for the broadcaster, believes local stations are valuable assets even as most of the television industry pivots to streaming. If Standard General thought local stations were being made obsolete by cord-cutting and the other forces eroding traditional ratings, then “we’re not making an investment this large,” Standard General founding partner Soo Kim says.
Hedge fund investor Soo Kim takes a long-sought prize in Tegna’s sale to Standard General and Apollo Global Management. The deal has many layers to tease out and potential regulatory headwinds, along with questions about the new regime’s depth of commitment to news.
Following the close of the $24-a-share transaction, Deb McDermott will continue to lead the group. Tegna stations in Austin (KVUE), Dallas (WFAA and KMPX) and Houston (KHOU and KTBU) are expected to be acquired by Cox Media Group from Standard General. Also after closing, Premion is expected to operate as a standalone business majority owned by Cox Media Group and Standard General.
The defeat of a proposal by Standard General’s Soo Kim is a victory for Tegna Chairman Howard Elias and CEO David Lougee and followed announcement of a 7 cents a share dividend to shareholders earlier this morning.
Soo Kim’s ill-timed persistence for seats on Tegna’s board has been undermined by statements from three influential proxy advisers. And that’s a good thing. Current management led by CEO David Lougee may have its faults, but it beats Kim, whose goal is to merge or sell the company out of existence.
The company seeks to correct “Standard General’s many errors and false and misleading statements” while detailing Tegna’s “strong performance, experienced board, and focus on shareholder value.”
The TV group says two of the four unsolicited acquisition proposals have been withdrawn in the wake of the coronavirus pandemic and the other two parties have not signed confidentiality agreements to enable due diligence and have not delivered any information on financing sources.
It objects to the request from investor Standard Media that Standard’s Soo Kim and three others be added, citing “serious concerns about Mr. Kim’s prior business and board service, including a track record of endorsing and executing corporate actions in favor of his own investments to the detriment of other shareholders.”
The imminent collapse of Sinclair’s merger makes the combative station group one of the all-time losers in FCC regulatory history, but they’re not the only ones who’ve lost. Here are some of the other losers caught up in this week’s train wreck along with some of the winners. At the top of the latter group is FCC Chairman Ajit Pai, who has clearly signaled that he is no pushover.