WASHINGTON, D.C.—The NCTA has told the FCC that it will not oppose Standard General’s deal for Tegna if the FCC “adopts binding conditions to ensure that the affected broadcasters comply with the bar on joint retransmission consent negotiations codified in the Communications Act and the Commission’s rules.”
If the $8.6 billion merger of Apollo Global Management (AMG), Standard General L.P., and Tegna is approved, Standard General would acquire Tegna’s 61 full power television stations and two radio stations across 50 markets. Apollo will control the licenses of 31 full-power television stations in 26 markets and 54 radio stations in 11 radio markets.
In a letter to the FCC, the NCTA proposed a number of binding conditions on how the broadcasters negotiate retransmission agreements that would codify what Standard General and Tegna have already promised the Commission.
More specifically, the NCTA noted that Standard General and Tegna have told the FCC that they will negotiate retransmission consent separately and not “enter into any Sharing Agreements or other agreements related to programming, operations, or sale of advertising with each other for any station.”
The NCTA also noted that the broadcasters have assured the FCC that the security holdings of AGM and the Cox Media Group in post-transaction Tegna do not give the them “any right or ability to participate in the day-to-day management or operations of Post-Transaction Tegna or in Post-Transaction Tegna’s negotiation of contracts (including retransmission contracts)” and that “AGM and CMG also will have no right of access to or ability to review any competitively sensitive confidential information of Post-Transaction Tegna, including Post-Transaction Tegna’s retransmission consent agreements.”
Despite these promises, NCTA stressed that “the proposed transaction creates a web of interlocking interests among the companies – Standard General/Tegna and CMG/Apollo – thus raising concerns about information-sharing and coordination of retransmission consent negotiations” that would violate FCC rules regarding retransmissions consent negotiations.
“According to one report, Apollo is loaning Standard General nearly $700 million to finance its purchase of Tegna,” the NCTA said. “Another report states that `Apollo also apparently will invest $925 million in preferred equity funding’ in the transaction. The transactions also involve a host of station swaps between Tegna and CMG. The collection of interlocking relationships creates, in the aggregate, a high risk that the parties, post transaction, will have the incentive and the ability to share information or otherwise coordinate their retransmission consent negotiations. If such coordination were to occur, it could violate the ban on joint negotiations and harm consumers.”
To avoid those problems the NCTA proposed that the FCC impose a number of conditions, including:
- "No employee or agent of Tegna or CMG/Apollo involved in retransmission consent negotiations may review any retransmission agreement to which the other entity is a party, or receive non-public information with respect to such agreement.
- No employee or agent of Tegna or CMG/Apollo may provide a copy of a station agreement or non-public information regarding such agreement to any employee or agent of the other entity involved in retransmission consent agreements.
- Tegna and CMG-Apollo may not engage common legal counsel or other agents in connection with retransmission consent negotiations.
- Tegna and CMG/Apollo must each maintain in its online public file a list of all other broadcast stations with which it has a sidecar agreement, the licensee of each such station, and whether Tegna or CMG/Apollo has an attributable interest in the licensee.
- As the applicants committed in their June 13 Letter, the FCC should also adopt a merger condition that the “Combined Company, AGM, and CMG . . . will not enter into any Sharing Agreements or other agreements related to programming, operations, or sale of advertising with each other for any station.”
- Any new JSA, LMA, SSA or similar agreement involving Tegna or CMG/Apollo that is not otherwise barred by the immediately preceding condition must be filed in the stations’ online public files and separately in the instant merger docket 30 days prior to taking effect," the NCTA proposed.
“Adoption of these or similar conditions would be in the public interest and help ensure effective enforcement of the Commission’s ban on joint retransmission consent negotiations,” the NCTA concluded.
The NCTA letter is available here.
