Standard, Tegna and Apollo Respond to Media Bureau 2nd Info Request
The FCC’s second request for information is “highly irregular” and fodder for “an endless fishing expedition,” said Standard General, Tegna and investor Apollo Global Management in their joint response to the Media Bureau’s questions, posted partially redacted Friday in docket 22-162. With just days left on the deal’s 180-day shot clock, the transaction isn’t expected to progress soon at the commission and could be in danger of being blocked, broadcast industry officials told us. Standard, Tegna and Apollo “are astonished that this Transaction, with all of the benefits that it offers to the public interest, is at the receiving end of unrelenting and baseless attacks and delay tactics from the petitioners,” said the information submissions.
Broadcast officials said they believe the FCC’s two Republican commissioners would support the deal, but the agency is divided 2-2 and a vote would require Chairwoman Jessica Rosenworcel to circulate an order on the transaction. That’s considered unlikely anytime soon, after a recent letter signed by House Speaker Nancy Pelosi, D-Calif. (see 2210060033), broadcast industry officials said. The parties may need to offer concessions on the transaction, such as conditions on retransmission consent negotiations, to move the acquisition along, industry officials said. “I think they’re so far along, they’ll find a way to get it through,” said S&P Kagan analyst Justin Nielson. Standard has been pursuing control of Tegna for a number of years and was involved in proxy fights for the company’s board before initiating this buy. “I don’t think there’s enough cause to scuttle the entire deal,” Nielson said.
There's no legal requirement for the FCC to rule on deals within 180 days, and the parties have virtually no way to force the agency to act, broadcast attorneys said. The FCC’s rules also don’t provide a way for the commissioners to force something onto the agency’s agenda, they said. The deal was originally expected to close in Q4 2022, but that’s increasingly unlikely.
The FCC already had access to the documents -- which concern ownership structure, staffing and retransmission consent information -- submitted in response to the second request because they were submitted to DOJ for Hart-Scott-Rodino review, said Apollo, Tegna and Standard in their filings. “Rather than aid the Commission’s review, the result of this exercise is to provide the Applicants’ Highly Confidential Information -- which, by definition, is some of the Applicants’ most competitively sensitive data -- to the petitioners.” Employment and programming decisions are “necessarily in the discretion of licensees, not the government,” said the companies. “The implication that the Commission would select broadcast licensees based on whether they will air the desired amount of government-preferred programming raises obvious First Amendment issues.”
Opposition from public interest groups is “peculiar” because the new company would be headed by Standard CEO Deborah McDermott and chaired by Standard founder Soo Kim, increasing ownership diversity, said Standard, Tegna and Apollo. The opposing groups “have taken the inexplicable position that neither Soo Kim nor Deborah McDermott fit within petitioners’ own definition of diversity.” The deal “will result in, by far, the largest minority-owned and female-led TV broadcasting company in U.S. history,” said the information submission.
In an ex parte filing posted Friday, Standard also targeted arguments from the Communications Workers of America’s NewsGuild and National Association of Broadcast Employees and Technicians sectors that Standard hasn’t been truthful about its staffing plans. The unions are misrepresenting projections from mid-2021 that included staffing changes Tegna already was planning to make, Standard said. “A financial model is a tool. It is not a business plan and binds no one to anything.” It “would not have made any business sense or even have been possible for Standard General to have made decisions about station staffing at that time with the limited information available to it.”
“Standard General has also repeatedly confirmed, including in the record under penalty of perjury and directly to the employees of TEGNA, that it has no intention of reducing station news or journalism jobs, or, indeed, station staffing more generally,” said the response filing.
“The applicants have to show on the record proof that backs up what they’re saying to the commission and we will be scrutinizing what they have put forward so far,” said attorney David Goodfriend, who represents the unions. The unions also repeated the staffing accusations in an ex parte filing posted Friday. “There are important unresolved questions about the applicants’ stated ‘intent’ not to cut station-level jobs, which may or may not be clarified by the forthcoming responses to the Media Bureau’s outstanding document request,” said the filing. “No conditions can be crafted that would permit grant of the application consistent with the public interest.”