Standard's Kim 'Optimistic' for Approval Before Feb. 22
Standard General founder Soohyung Kim is “optimistic” regulators will approve the company's proposed $8.6 billion buy of Tegna before Feb. 22, the merger agreement date on which Tegna can choose to pull out of the deal or trigger a 50% increase in the ongoing ticking fee, increasing the purchase price, he said on a press call Monday. Friday was the end of an FCC comment period on concessions offered by Standard (see 2301170064), and the company told the agency it doesn’t object to those concessions being codified as merger conditions, though it resisted requests from MVPDs and public interest groups. New Tegna would be the nation’s second-largest broadcaster by revenue, Kim said.
The transaction is “closer to the end and not the beginning,” Kim said. “We’d prefer economically to get this done in the current ticking fee.” The current ticking fee has been running since November, and has so far increased the purchase price of Tegna by more than $22 million, Standard said. Kim declined to comment on whether Tegna would stay in the deal or on how long Standard would wait for approval but said all the signatories to the agreement have been working “above and beyond” to make the acquisition happen. Standard is in ongoing dialogue with federal regulators, Kim said. Tegna didn’t comment.
Standard said in reply filings Friday that further delay is against the public interest and causing economic harm to Tegna’s stations, but Kim said Monday the company expected and welcomes regulatory scrutiny. The deal has been misperceived, and fears about investor Apollo Global Management’s influence and ownership of Cox Media Group aren’t warranted, he said. “We will make all the decisions, we are the sole attributable owner,” Kim said. It is “almost that people are not seeing us,” he said of himself and Standard CEO Deborah McDermott. “Every time we talk about ourselves someone wants to talk about the other capital providers in the room." This is "the longest period of time between the filing of applications and approval for any major television transaction in history not requiring rule waivers or station divestitures," Standard said. According to the FCC, the deal is on day 277.
Tegna is publicly traded so Apollo could buy a larger interest in Tegna than the deal would give it without informing the FCC, Standard said Friday. “A broadcaster having an investment in another broadcaster is neither novel nor prohibited,” Standard said, citing FCC rules that allow the holder of a financial interest to own up to 33% of a licensee's assets before being considered attributable. “The aggregate interest in post-Transactions TEGNA proposed to be held by AGM and CMG would need to be nearly ten times larger to be considered attributable by the FCC under that rule,” Standard said.
The FCC should approve the purchase soon and reject calls from MVPDs to impose additional conditions beyond those offered by Standard, the company said Friday. Standard said proposals from Dish and the American TV Alliance to limit information sharing, sales agreements or the possible clauses of retransmission consent contracts are “opportunistic and untimely requests” intended to advantage MVPDs. “The commission should therefore reject these efforts to continue moving the goal posts in this proceeding,” Standard said
“If ATVA and its members find that ‘[a]fter-acquired station clauses are often problematic,’ then they should stop agreeing to them,” Standard said. Kim said Monday that retransmission consent rates are becoming “less and less” of an important factor in the broadcast industry, and rates don’t differ among broadcasters as much as they once did. “It definitely doesn’t matter in the medium or any longer term,” he said.
Standard also disagreed with arguments from unions and public interest groups that its acquisition of Tegna would lead to job losses. Standard committed to “preserve newsroom jobs during a time of great economic uncertainty and layoffs across the media industry,” the filing said. The company also accused the unions of possibly violating the FCC’s protective orders governing confidential documents by sharing them with attorneys for the United Church of Christ and Common Cause. “That Petitioners must resort to these bad-faith tactics underscores the lack of substance their comments have to offer,” said Standard. Attorney Andrew Schwartzman, who represents the NewsGuild and National Association of Broadcast Engineers and Technicians in the proceeding, said Monday there was no violation and he will file a clarification.
The FCC should give its OK because Standard will increase local news and ownership diversity, Standard said. The transaction would increase the amount of Asian American-owned TV stations by “more than 700%,” Standard said. The deal “would increase the number of Asian American-owned TV stations in the top-50 markets from 1 to 27, making approval of the Applications perhaps the single most impactful diversity initiative in the Commission’s history,” Standard said. “We understand that the FCC and Chairwoman [Jessica] Rosenworcel value and prioritize diversity of underrepresented communities,” Kim said.