Standard General L.P. is vowing to continue its efforts to complete its proposed transaction with TEGNA (NYSE: TGNA), despite the unprecedented actions of the FCC’s Media Bureau, which belatedly designated two questions related to the deal to an Administrative Law Judge. The Media Bureau’s action, which was promptly criticized by two of the FCC’s four current Commissioners, is tantamount to denying the transaction by initiating a lengthy process that would extend well beyond the transaction’s Final Extension Date of May 22, 2023.

Standard General is calling on the Federal Communications Commission (FCC) to formally vote now on the proposed transaction and render a decision on the merits.

Commenting on the situation, Standard General’s Managing Partner Soo Kim said, “A decision delayed is a decision denied. Our proposed transaction is consistent with all FCC regulations and precedent. It is bolstered by a voluntary commitment to invest in local news, preserve newsroom jobs, and address purported concerns related to consumer pricing. But rather than rule on the transaction’s merits, as the law requires, the Media Bureau is attempting to scuttle the deal by ordering a wholly unnecessary hearing process, that if left standing by the Commission, would kill the deal.”

As part of Standard General’s efforts to persuade the FCC to address the Media Bureau’s unprecedented action, it calls attention to a number of salient facts, some of which have not been widely reported:

• The TEGNA transaction is a transfer of an existing broadcaster to Standard General, an entity that had been TEGNA’s sole “Attributable Owner” under FCC rules. Standard General currently is a license holder in good standing of multiple television and radio stations and has been for more than a decade.
• This transaction, which actually makes TEGNA smaller as a result of the subtraction of several of its largest stations, complies with all FCC ownership rules and precedent and requires no waivers. The applicable waiting period under the HSR Act has expired.
• The FCC had this transaction under review for 354 days and counting. Not only is this long past the FCC’s own informal 180-day ‘shot clock’ but will soon become the longest reviewed major television broadcast sale ever.
• Over the course of the extended review process, the FCC has opened an unprecedented three separate Public Comment Processes.
• All throughout this period, the Media Bureau has consistently declined our requests to meet to address any concerns it might have. The Media Bureau has never provided any feedback to our responses. The very questions raised in the Hearing Designation Order we have responded multiple times going back to July 2022. Note our voluntary remedies were proposed without the benefit of feedback from the FCC or from the objectors despite every attempt to engage with them.
• Unlike previous proposed transactions that have been blocked by the FCC, there is no allegation that this deal violates any FCC rule, nor are any of the parties accused of any inappropriate action or conduct.
• To the best of our knowledge, this is the first time that the FCC has acted through the Media Bureau in a manner designed to kill a pending transaction:
  • Without referencing a single rule or regulation that the proposed transaction might violate.
  • Without any consideration of conditions that would address any outstanding concerns.
  • By raising issues that fall outside the Media Bureau’s authority.
  • By designating it for evidentiary hearing despite having already received all relevant documents and internal communications in the unprecedented two prior document productions.
  • And much less a transaction of this magnitude without a full vote of the Commission.
• The transaction advances the FCC’s stated goal of increasing diversity in media ownership, representing the biggest opportunity in history to expand minority-ownership and woman-leadership of local broadcast television stations.
• Despite some of the objectors denying that our ownership would satisfy this FCC-stated goal, a wide array of civil rights organizations, legislators and labor and minority media groups submitted supportive comments to the FCC, detailing the many ways in which this transaction would advance the public interest.

In all these respects, the Media Bureau’s actions stand in sharp contrast to other recent broadcast transactions which required special FCC actions, yet were all approved by the Commission in a timely manner.

Mr. Kim concluded, “The unavoidable implication is that this particular transaction may be scuttled not due to substantive or evidence-based concerns, but rather by the Media Bureau’s unexplained view that Standard General simply should not be allowed to own these television stations and that any future applicant to acquire TEGNA or any other TV station group must meet the test of being acceptable to the Media Bureau in its sole, absolute, and unreviewable discretion. This precedent, if allowed to stand unchallenged, will turn the “Public Interest” standard on its head by restricting investment in and ownership of wide swaths of the economy to those deemed acceptable by regulators.”

About Standard General

Standard General was founded in 2007 and manages capital for public and private pension funds, endowments, foundations, and high-net-worth individuals. Standard General is a minority-controlled and operated organization. Soo Kim, Standard General’s Managing Partner and Chief Investment Officer, is supported by a diverse, highly experienced 17-person team, including seven investment professionals with over 120 years of collective investing experience.

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