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'Unusual and Unprecedented'

Standard General Promises Aren't Enough, Say Tegna Deal Opponents

Standard General’s proposed concessions aren’t enough to prevent higher retransmission consent rates or collusion between Standard and Cox Media Group owner Apollo Global Management, said comments filed in docket 22-162 in response to the FCC’s request for feedback.

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The American Television Alliance and Dish want stricter conditions that would be codified in the merger order, but a group of communications worker unions and public interest groups said no conditions could be sufficient. To have “any hope of remedying the harm caused by intertwining Cox and TEGNA, they must be precise, extensive, clear, and easily enforceable,” said ATVA. “The parties contrived an unusual and unprecedented scheme that is not amenable to repair,” said the Communications Workers of America's NewsGuild sector, Common Cause and others in a joint filing. Standard General didn’t comment. Comments were due Friday.

Previous FCC to attempts to forestall anticompetitive behavior with merger conditions have been difficult to enforce and questionably effective, said the unions and public interest groups, which also included the United Church of Christ and the National Association of Broadcast Engineers and Technicians. It took years for Bloomberg to resolve a dispute with Comcast over channel “neighborhooding” restrictions from Comcast/NBC (see 1408260040), the groups said. The groups also cited the joint negotiation dispute involving stations affiliated with Sinclair Broadcast (see 2203140073) and Nexstar’s recently resolved litigation with Comcast and Charter (see 2301120037) as examples of the difficulty of enforcing conditions. “It took four years for an entity with massive financial power to take advantage of behavioral conditions to which it was entitled,” the groups said of Bloomberg.

All the commenters said Standard's promises not to apply after-acquired clauses to the Tegna stations or share retrans information wouldn't keep the company from raising retransmission consent rates or sharing information. Those concessions need to be codified into a merger order and broadened to work, said ATVA. Language preventing information sharing among those involved in retrans negotiations should include the applicants' CEOs, chief financial officers and general counsels, ATVA said. Preventing the companies in the deal from sharing retrans information with any third party would be better, said ATVA. Such an approach would “eliminate interpretive questions about who is or isn’t ‘involved in retransmission consent negotiations,’” ATVA said.

Dish said the FCC should broaden the conditions to also include Cox Media Group, which it has accused of trying to negotiate retrans deals for Tegna’s stations. “There is no need for fortune telling here because Cox has already shown it will raise prices if left unrestrained,” Dish said. Cox denied doing so, in a letter to the FCC (see 2301030063).

The FCC should also prevent the new company from arranging contracts so Cox and new Tegna’s retrans agreements don’t expire the same day, which would create leverage in negotiations, ATVA said. “That the parties know the expiration dates of each other’s contracts creates a risk of future collusion when these contracts are up for renewal,” said ATVA. The FCC should require “that Cox or TEGNA must extend its agreement with any MVPD by six months upon the request of an MVPD,” ATVA said.

​​​​​​​The unions and public interest groups disagreed with Standard founder Soohyung Kim’s assertion that retransmission consent was not central to the deal's thesis, calling it a “material misrepresentation” to the FCC. Standard provided banks with revenue projections incorporating the increased retrans revenue, in documents that “repeatedly used the terms ‘Deal Thesis’ and ‘Investment Thesis,’” the groups said. “There is no way to reconcile this history with Mr. Kim’s statement to the Commission.”

​​​​​​​Opportunities for Apollo and Standard to collude would go beyond retrans, said the unions and public interest groups. “There would be no FCC-imposed limitations on their ability to share information and develop joint negotiation strategies for syndicated programming and the numerous specialized vendors that serve local TV stations,” said the groups. That could also apply to union negotiations, the groups said. Standard’s most recent promises that it won’t do newsroom layoffs fall short of earlier pledges to keep all current station level staffing, the groups said. Standard's proposed two-year term isn’t long enough, they said (see 2212230041). “Even if formally adopted as conditions in a Commission order, the new pledges fall woefully short of what would be needed to protect locally originated news.”