Standard General managing partner Soo Kim has asked to meet with Sen. Elizabeth Warren (D-Mass.) after the legislator wrote to FCC chair Jessica Rosenworcel this week asking the regulator to block Standard General’s proposed purchase of Tegna assets for north of $8 billion.
The Federal Communications Commission is currently seeking comment on a number of pledges the companies have made to address anti-competitive concerns, but Warren told Rosenworcel that such conditions are “historically ineffective and should provide no comfort that these Wall Street firms will not engage in anticompetitive practices after the deal is completed.”
In a letter to Warren Friday (January 13), a copy of which was provided to Broadcasting+Cable, Kim said he wanted to meet with Warren to talk about her concerns, but in the interim said that the rationale for the deal is to create a stronger local broadcaster to compete with Big Tech and media “giants.”
Kim suggested that job cuts at Tegna were more likely if the deal doesn’t go through than if it does.
“Respectfully Senator, we would also ask you to consider the impact if this deal is blocked,” Kim wrote. “As an immediate effect, Tegna, as a publicly traded company, would be left subject to the intense pressure of the public markets to cut costs as the economy slows, ad spending shrinks and competition increases. The current economic climate has made announcements of media job cuts routine across the industry, including most recently at CNN, Gannett and The Washington Post.”
He also told Warren that blocking the deal would mean preventing the creation of the largest minority-owned and woman-led broadcaster in the country.
Kim is Asian-American and Standard Media is run by Deb McDermott.
“If that fact means nothing to regulators in their public interest assessment — indeed, if the goalposts are moved to make approval far harder than any previously proposed transaction in this industry, it only diminishes the chances of other minority entrepreneurs entering this critically important space,” he wrote.
Also: Standard General, Tegna Say Deal Opposition Is Legally Irrelevant
The commitments the FCC is currently vetting from Standard General include agreeing not to apply higher retrans rates to Tegna stations due to so-called “after-acquired” clauses that could otherwise raise Tegna retrans rates to those of Standard General stations and agreeing, as multichannel video programming distributors (MVPDs) had called for, not to enter into joint sales agreements (JSAs), shared services agreements (SSAs) or local marketing agreements (LMAs) between Tegna and Cox Media Group stations. (CMG parent Apollo Global Management is providing funding for the proposed merger and getting stations in a side deal.)
Standard General agreed to acquire Tegna in an $8.6 billion transaction that includes the assumption of $3.2 billion in debt. Apollo is providing some of the funding for the deal.
Addressing critics concerned about the relationship with Apollo, Kim told Warren: “[C]ontrary to a common misperception, Standard General does not, in fact, own any stake in Cox Media Group (‘CMG’). Regardless, as a ‘belt-and-suspenders’ effort to address any conceivable concerns regarding Apollo’s role as one of the smaller sources of financing for the Tegna acquisition, we have fully committed to not enter any joint sales, shared services or mocal marketing agreements with CMG stations. This despite the fact that Tegna today could enter into just such contracts consistent with FCC rules and policies.”
Petitions to deny the deal were filed by unions The NewsGuild-CWA and the National Association of Broadcast Employees and Technicians (NABET)-CWA, as well as station group Graham Media Holdings.
The FCC is currently on day 267 of its informal 180-day shot clock for merger reviews. ■
