Court rejects Standard General petition to speed up Tegna deal

The Standard General-Tegna merger proceedings have seemingly reached a halt, as the DC Court of Appeals on Friday denied Standard General’s petition urging the Federal Communications Commission (FCC) to make a swift vote.

The court earlier this month rejected Standard General’s initial appeal, which sought to reverse the FCC’s hearing designation order from February. However, it allowed the hedge fund to submit a conditional writ of mandamus petition. If the court had granted the petition, it would have forced the FCC to reach a decision on the $8.6 billion transaction.

The rejected petition came as no surprise, according to a New Street Research note to investors on Friday. The DC Court of Appeals ruled Standard General has “not demonstrated that respondent [FCC] has unreasonably delayed in acting on their applications.” Furthermore, Standard General hasn’t shown that the FCC has a “crystal clear duty” to rule on the transaction without resorting to a hearing.

The FCC’s hearing designation order sent the case to the commission’s Administrative Law Judge (ALJ) to review concerns. Such a process is lengthy and often considered a deal-killer, and Standard General has said the review would make it unable to complete the transaction before the May 22 financing deadline.

“While there may be various appeals and while the Administrative Law Judge proceeding is moving forward, we view the matter as largely closed, as none of those routes are likely to result in the transaction being approved before the May 22nd deadline for the financing commitments,” NSR’s Blair Levin wrote to investors.

Opponents of the Standard General-Tegna deal, including the NewsGuild-CWA and NABET labor unions, have argued the transaction could harm journalism jobs and increase consumer prices and retransmission fees for MVPDs, among other concerns.

The DC Circuit Court’s rejection of Standard General’s petition came days after the company expanded its prior commitment to not cut Tegna newsroom jobs by an additional year.

In a statement released Friday, CWA said Standard General’s “attempt to push a harmful merger through the court system” after the FCC’s hearing designation “has been found to have no merit.”

The union further argued newsrooms across the U.S. “are being bought and stripped by hedge funds like Standard General,” putting local communities at risk to “news deserts” and “misinformation campaigns.”

“[The FCC’s] refusal to rubber stamp Standard General’s proposed Tegna takeover was the result of repeated failures by the Wall Street funds to prove that their deal served the public interest,” CWA concluded.