Standard General defends Tegna buy to FCC, says opposing claims are 'legally irrelevant'

As the Federal Communications Commission (FCC) continues to scrutinize Standard General’s acquisition of Tegna, Standard General rebuffed comments others have made opposing the deal, arguing those claims are “legally irrelevant” to the FCC’s review of the transaction.

In an FCC filing dated July 7, Standard General outlined three principal allegations petitioners have made against the acquisition.

First, Tegna’s sale will result in a reduction of local news and loss of journalism jobs, followed by MVPD subscriber rates “automatically” increasing due to a rise in programming costs. The third presented argument was that Apollo Global Management would have an attributable level of influence with the privately held Tegna.

Standard General shot down the first claim, stating the assumption the company will eliminate journalist jobs is “entirely unsupported and simply wrong.”

Companies that have petitioned the FCC reagrding the $8.6 billion deal include Graham Media Holdings, NCTA and Communications Workers of America’s (CWA) NewsGuild and National Association of Broadcast Engineers and Technicians.

Standard General expects to close the transaction sometime in the second half of this year, with Tegna shareholders approving the acquisition in May.

The two CWA unions, which urged the FCC to deny the deal, alleged a Standard General-controlled Tegna would negatively affect the journalism job market.

“The operating model of hedge funds like Standard General and AGM is to cut operating costs and sell off underperforming assets, with a relentless focus on satisfying their investment partners,” said the union groups. “Reducing labor costs through cutting jobs, reorganizing and limiting salaries is a central element of that model.”

Standard General countered that argument by saying it’s actually increased newsroom staffing at its four stations by 28%, since acquiring them in 2021. One of those broadcast stations was KBSI, licensed to Cape Girardeau, Missouri.

The company added that the opposition from NewsGuild and other organizations is “surprising,” given the acquisition stands to create “the largest minority-owned and female-led television station group in U.S. history.”

Competition and retransmission

Graham Media Group, which owns seven broadcast stations in six U.S. markets, argued the Tegna sale would undermine local broadcast coverage. Particularly, Graham Media’s owned stations in Jacksonville, Florida, where the company said the deal will hurt its ability to compete fairly for viewers, ad revenue and local talent. The company asserts it would also consolidate an already highly consolidated Jacksonville market "to effectively two competing broadcast companies." 

“If the FCC approves the Transaction as proposed, the large investment companies behind it will own and/or operate all four of the major network-affiliated stations in Jacksonville,” said Graham Media’s filing.  

NCTA, while it doesn’t oppose the acquisition, has asked the FCC to ensure there aren’t any “interlocking relationships” among the consolidated company, Apollo and Cox Media Group. Standard General plans to sell off three of its Tegna stations to Cox once the deal closes.

Such interlocking relationships, NCTA said, would give these companies the ability “to share information or otherwise coordinate their retransmission consent negotiations,” which would undermine the FCC’s ban on joint negotiations between MVPDs.

NCTA also cited a report that said Apollo has loaned Standard General nearly $700 million to finance its purchase of Tegna. Standard General reiterated Apollo will only have non-voting preferred shares in Tegna, without board rights.

“AGM is merely one of seventeen entities facilitating the funding of the Tegna acquisition, with no rights to anything but a fixed rate of return until its shares are redeemed at Standard General’s election,” Standard General wrote.