WASHINGTON—Standard General, Tegna and Cox Media petitioned the FCC on Friday to rescind a decision by the FCC's Media Bureau to have an FCC administrative court judge review Standard General's proposed $8 billion merger with Tegna after the judge agreed last week that such a review was proper. Last month, the Bureau issued the hearing designation order to send the matter to an FCC judge after it said it could not conclude whether Standard General’s takeover (backed by hedge fund Apollo Global Management) was in the public interest.
"Today, we filed a formal Application for Review with the FCC regarding the Media Bureau’s hearing designation order, which threatens to torpedo our effort to build a company that will expand investment in local news, protect local news jobs and create the nation’s largest ever minority-owned, female-led broadcast television company," the station groups said in their filing. "As we have made clear previously, our applications comply with all FCC rules and deserve a vote by the FCC Commissioners, which any three Commissioners can request. Instead, the Media Bureau’s order is endangering those public interest benefits through a transparent effort to exercise an unlawful, unprecedented and indefensible pocket-veto."
Standard General agreed to acquire Tegna over a year ago and the company has frequently criticized the commission for delaying a final vote on the deal, expressind concern that such further delays could scuttle the deal, which could expire by May 22.
It added that the Media Bureau's original decision is “not only unnecessary and unfair—it is unlawful. The Communications Act, the Commission’s rules, and an unbroken chain of precedent require grant of the Applications. The Commission has a clear obligation to intervene to prevent the Media Bureau’s disparate treatment of the Applications from depriving the public of substantial benefits of the transactions while damaging both Tegna and the entire broadcast industry’s future access to investment capital and financing, all to the great harm of the public interest."
The station groups also said in their filing that the Media Bureau could not deny the merger based on threats to increase retransmission fees or layoff journalists, something that the company said it would not do if the deal was approved.
"Under binding Commission precedent, the Media Bureau cannot lawfully reject the Applications based on the Transactions’ potential to increase retransmission consent fees under contracts previously negotiated at arm’s length by market participants," the filing said. "Moreover, Standard General irrevocably waived enforcement of after-acquired clauses on which the Bureau’s purported concern about increased fees rests. Nor can the Bureau lawfully block the transactions based on hypothetical nondiscriminatory reductions in local staffing, particularly where Standard General actually committed not to reduce journalism or newsroom staffing for at least two years.”
In addition, they said that the decision to have an FCC administrative judge rule in the case was a violation of the Constitution since the judge doesn’t answer to the President.
“Time is of the essence,” they said. “As set forth in documents applicants filed with the Media Bureau, the “Final Extension Date” of the Standard General-Tegna merger agreement is May 22, 2023. That deadline will pass long before a full evidentiary hearing could be completed, and applicants have no ability to extend that deadline.
"If the Commission 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 HDO in effect denies the Applications without basis and without due process. The Commission should swiftly correct that overreach. If the Commission has not done so by 5:00 p.m. on March 27, applicants will have no choice but to seek judicial relief."
