Standard General Asks for Full FCC Review of Merger Review Decision
Standard General, Tegna and Cox Media warn that Media Bureau's recent decision jeopardizes merger
WASHINGTON—Standard General, Tegna and Cox Media are petitioning the FCC to grant a full commission review of the Media Bureau’s recent decision to designate a judicial review of Standard General’s merger with Tegna and Cox Media, warning that further delays to the controversial transaction could jeopardize the deal.
In a filing with the commission on Friday, Standard General said the Media Bureau’s decision to send the issue to an administrative judge (or Hearing Designated Order, aka “HDO”) could not be completed in time before the deal expires in May.
“Given the public interest benefits of the Transactions, the record in this proceeding and the fact that the Applications are consistent with all Commission rules and precedent, the Media Bureau has before it what it needs to make a public interest determination and to grant the Applications,” the companies said in their filing. “But it has chosen instead to depart sharply from the Commission’s rules, policies, and precedent.
"At the eleventh hour, the Media Bureau has designated for hearing matters that are legally irrelevant to the Commission’s review of broadcast transactions and beyond the scope of the Media Bureau’s authority—presumably knowing that a hearing (and subsequent “next steps”18 by the Bureau) cannot be completed in the less than three months before the deal (and financing) expires.
“Time is of the essence,” the petition continued. “As set forth in the documents filed with the Media Bureau and as has been publicly announced, the “Final Extension Date” of the Standard General-TEGNA merger agreement is May 22, 2023. That deadline will come and go long before a full evidentiary hearing could be completed. The Applicants have no ability to extend that deadline. If the FCC fails to grant the Applications before that date, the financing obligations of more than a dozen lenders helping to fund the transactions will expire as well. The Media Bureau’s decision to issue the HDO is therefore not just tantamount to denying the transactions at issue in this proceeding without having to reach a decision on the merits, it is absolutely a denial without due process."
Standard General repeated its assertions that it has alleviated opponent’s concerns over how the deal could impact station operations, saying that it “does not intend to reduce station-level staffing, and it has backed that up with a commitment not to conduct any journalism or newsroom staff reductions at the TEGNA stations for at least two years following the consummation of the Transactions. This issue too has been fully resolved.”
The filing questions the authority of having an administrative judge review the transaction, noting that “the Media Bureau’s deviation from established Commission practices clearly warrants the Commission’s intervention and correction.”
The petitioners note that the HDO could potentially violate separation of powers since the administrative law judge (ALJ) in the hearing would be immune from termination by the president.
“As a result, there is a controlling question of law as to whether an FCC ALJ is even permitted to make rulings in this matter as required by the Media Bureau’s HDO,” the petitioners said. “This question requires certification for immediate review. The Commission should have the opportunity to decide whether it wants to avoid a constitutional challenge to its ALJ before this matter proceeds further.
It also noted that the transaction, which has been pending for more than a year, has been notably opposed by two prominent groups, Common Cause/UCC and NewsGuild but discounts the volume of support it has received.
“While characterizing these opponents as ‘numerous,’ the Media Bureau’s HDO failed to acknowledge, let alone give any weight to, the comments of the approximately 40 interested parties that filed in support of the public interest benefits of the Transactions," the petitioners said.
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Tom has covered the broadcast technology market for the past 25 years, including three years handling member communications for the National Association of Broadcasters followed by a year as editor of Video Technology News and DTV Business executive newsletters for Phillips Publishing. In 1999 he launched digitalbroadcasting.com for internet B2B portal Verticalnet. He is also a charter member of the CTA's Academy of Digital TV Pioneers. Since 2001, he has been editor-in-chief of TV Tech (www.tvtech.com), the leading source of news and information on broadcast and related media technology and is a frequent contributor and moderator to the brand’s Tech Leadership events.