Tegna said it received 8.64 million of its shares from Standard General, whose effort to buy the broadcaster failed as regulatory review extended beyond the data its financing expired. Standard General’s deal with Tegna called for a $136 million termination fee, and Tegna said the shares it received satisfied that obligation.
In Killing Kim’s Deal For Tegna, The FCC Showed Its Prejudice
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.
Television station operator Tegna Inc. said on Monday it has terminated its merger agreement with hedge fund Standard General after several regulatory hurdles. Tegna last year agreed to be taken private by Standard General in a deal valued at $8.6 billion, including debt. At the time, the acquisition was expected to close in the second half of 2022. However, the deal attracted criticism from some members of Congress on concerns of potentially higher TV prices for consumers and job losses. Then, in February, the FCC decided to hold a hearing on the hedge fund’s bid in a step that has historically led deals to collapse.
Sen. Elizabeth Warren (D-Mass.) wrote FCC Chair Jessica Rosenworcel this week to provide moral support for the regulator’s decision to designate the Standard General-Tegna station group merger for hearing before an administrative law judge. Warren has been a critic of the deal as anticompetitive consolidation and a fan of the hearing designation.
Why Standard General’s Proposed Tegna Merger Hurts Our Democracy
Common Cause VP Kathay Feng says that hedge funds’ bottom-line mindset leads to less-robust local news operations. “The rapid decrease in local news should alarm everyone, especially heading into yet another consequential election year. With fewer resources to combat disinformation and hold power accountable, we have to do what we can to protect our local newsrooms.”
Standard General said the FCC’s Enforcement Bureau has “suggested” the company “attempt to resolve remaining concerns to allow the transaction“ — its purchase of Tegna’s TV stations — “to move forward,” which it said it is definitely trying to do. Standard General’s invocation of the Enforcement Bureau suggestion was a reference to a meeting with FCC officials last week.
The Republican leadership of the House and Senate committees overseeing the FCC has asked the regulator’s acting Inspector General, Sharon Diskin, to look into FCC Chair Jessica Rosenworcel’s handling of the review of the Standard General-Tegna merger.
Heavy hitters from both sides of the Standard General/Tegna merger debate, including former Democratic FCC and FTC chairs, met with the FCC’s Republican commissioners last week as the companies attempted to get the FCC to give them a thumbs up or thumbs down on the deal ASAP.
The FCC is facing an 11th-hour pressure campaign from civil rights leaders to vote on whether a New York hedge fund’s proposed purchase of a local TV broadcaster should be approved. Standard General, a hedge fund co-founded by Korean-American Soo Kim, wants regulatory approval of its planned $5.4 billion purchase of Tegna, a TV broadcaster with 64 local stations. President Biden’s FCC is caught between two competing agendas within the Democratic Party: Increasing minority ownership of media companies, and preventing consolidated ownership of local TV stations — in this case, at the hands of a hedge fund.
There will now definitely not be any action from the FCC, or its administrative law judge, on Standard General’s acquisition of station group Tegna deal before the plug is expected to be pulled on its financing. That’s because that ALJ Jane Hinckley Halprin has suspended her review “until further notice” after holding a status conference.
Earlier this week, U.S. Senator Bob Menendez (N.J.) took to the Senate floor to express his concerns over the Federal Communications Commission’s review of the proposed Standard General-Tegna transaction. His is the latest in a chorus of alarm bells sounding over a flawed merger review process that risks undermining both investment in local television stations’ free service to the public and media diversity.
The leadership of the FCC is facing a possible reshuffling as a powerful Democratic senator threatened to hold up a key confirmation if the agency didn’t vote on a stalled cable deal, sources told the New York Post. New Jersey Sen. Bob Menendez railed on the Senate floor about the FCC jeopardizing the offer by Soo Kim’s Standard General to buy Tegna, the owner of 64 television stations, “through, in essence, inaction.”
The U.S. Court of Appeals for the D.C. Circuit has denied Standard General’s petition asking the court to force the FCC to vote on its proposed acquisition of Tegna before its financing expires on May 22. The ruling appears likely to kill $8.6 billion acquisition.
Looking to try and give the FCC some way to say “yes” on their planned merger, Standard General and Tegna have added what they said are “unprecedented” commitments to the unions — TNG-NABET — attempting to block it at the commission. While the companies have already said they have no plans for layoffs, they have now committed to no newsroom layoffs for at least three years, up from the two years over which they had already pledged not to have “headcount” reductions in their newsrooms.
Standard General and Tegna filed their reply brief asking the U.S. Court of Appeals for the D.C. Circuit to force the FCC to rule in their proposed merger before financing expires on May 22, effectively killing the deal. The FCC and its Media Bureau have been examining the deal since last February, an unprecedentedly lengthy review and twice as long as the FCC’s guidelines.
Top Republicans on FCC oversight committees say the FCC’s Media Bureau decision to designate the Standard General-Tegna deal for hearing before an administrative law judge was unfair and a violation of a congressional charge to “promote competition and reduce regulation.” They want the FCC to answer a host of questions related to the decision.
One of Standard General’s appeals to get its acquisition of Tegna approved by the FCC before its financing expires on May 22 was dismissed Monday by a panel of U.S. Court of Appeals for the D.C. Circuit judges.
Opponents of the Standard General-Tegna merger say the companies’ application for “emergency” expedited court review of the FCC’s designation of the deal to a hearing before an administrative law judge should be rejected. In opposition to an expedited court review of the FCC decision filed with the U.S. Court of Appeals for the D.C. Circuit, The NewsGuild, the National Association of Broadcast Employees and Technicians-CWA, United Church of Christ and Common Cause, told the court that the designation is not an appealable final order.
Standard General is getting an accelerated proceeding from the D.C. Court of Appeals after filing a lawsuit against the FCC that in part seeks to overturn the commission’s move to send the firm’s proposed acquisition of broadcaster Tegna to an administrative law judge for further review.