Pelosi, Pallone Raise Concerns About Standard General/Tegna

House Speaker Nancy Pelosi, D-Calif., and Commerce Committee Chairman Frank Pallone, D-N.J., raised concerns Thursday about the Standard General/Tegna deal amid the FCC's ongoing review of the proposed purchase (see 2209200057). "We are concerned that this transaction would violate the FCC’s mandate by restricting access to local news coverage, cutting jobs at local television stations, and raising prices on consumers," the House leaders said in a letter to FCC Chairwoman Jessica Rosenworcel. The leaders' claims followed the FCC Media Bureau's request last week for additional information on Standard/Tegna, its second inquiry on the proposed transaction.

"This transaction deserves your full and complete attention to determine if it truly serves the public interest," Pelosi and Pallone told Rosenworcel. The deal "threatens to undermine localism, competition, and diversity by obscuring ownership of the airwaves through offshore holding companies in the Cayman Islands and British Virgin Islands." Tegna's "proposed new owners ... could immediately charge higher fees to pay TV providers, which may in turn be passed on to pay TV consumers," the leaders said: "The prices and fees charged for pay TV service have already skyrocketed in recent years -- and we are concerned about the impacts of further price increases on American families as they confront higher costs across the board."

“Given the potential impacts this transaction will have on our media marketplace, we believe" the Media Bureau's "further scrutiny is appropriate," Pelosi and Pallone said. The bureau is seeking additional documentation from Standard and Tegna about their staffing plans for the new company, their representations to investors, and retransmission consent rate increases. Responses to the second information request are due Oct. 13, supplementary filings Oct. 27; replies to those pleadings from Standard and Tegna are due Nov. 3, said a public notice Thursday. Standard and Tegna met with Media Bureau Chief Holly Saurer to discuss the scope of the request Monday, according to an ex parte filing posted Thursday.

"We are particularly pleased" that the Media Bureau "has requested additional information concerning specific plans for local news, the complex ownership structure, and calculations of post-transaction retransmission consent rate increases, among other things," Pelosi and Pallone said. "Given the potential impacts this transaction will have on our media marketplace, we believe that this further scrutiny is appropriate."

The Pelosi-Pallone letter and the FCC's additional information request don’t bode well for the transaction’s swift completion, broadcast officials told us. “It’s certainly not good for the parties,” to the transaction, said Holland and Knight broadcast attorney Charlie Naftalin. “Time is not any deal’s friend,” a media broker said.

Pelosi and Pallone "rarely weigh in on cases like this, but their letter shows that they understand the threat posed by predators like Standard General,” said Communications Workers of America's NewsGuild President Jon Schleuss in a statement. NewsGuild and the National Association of Broadcast Employees and Technicians were among the deal opponents who pushed for the FCC's additional query.

"We are reviewing the letter, and, consistent with long-standing practice, we do not comment on pending transactions," an FCC spokesperson emailed.

Deal opponents have misled Pelosi and Pallone via "false statements," Standard said Thursday in a statement. “We are therefore very disappointed to see the petitioners’ package of misstatements at the FCC being used to also mislead our elected representatives into applying improper pressure upon the FCC.” Standard said it told the FCC it doesn’t intend to cut jobs, “a commitment no prior FCC broadcast station applicant has ever made." The lawmakers' letter “speculates” about price increases on consumers “when TEGNA, as a broadcaster, makes its content available to the public for free over-the-air. Only cable companies decide what price their own subscribers pay."

The proposed Tegna deal complies with all FCC rules without the need for any waivers, divestitures, or special treatment,” Standard said. The company "seeks nothing from the FCC other than to be treated in the same fashion as other applicants whose transactions were promptly approved in the past two years,” including the commission's approvals of Gray/Meredith and Scripps/Ion. Standard/Tegna has been under review for nine months, longer than either of those prior transactions. Broadcast industry officials said the congressional letter and the second info request are likely to prolong that review period. The deal was originally expected to close in the second half of 2022, but that’s no longer certain, industry officials said.