Standard General CEO Soo Kim said he doesn’t understand the opposition to his company’s $5.4 billion acquisition of Tegna.

Petitions questioning the deal have been filed with the Federal Communications Commission by cable groups, public-interest organizations, unions and even a competing station group.

One of the concerns raised in the petitions is the role of private-equity giant Apollo Global Management, which controls station owner Cox Media Group and is involved in financing Standard General’s deal. In particular, it is claimed Apollo would work with Standard General to put pressure on cable operators in retransmission consent negotiations and consolidate newsrooms in markets where both own stations.

Kim told Broadcasting+Cable that he and Standard Media CEO Deb McDermott have a record of investing in the stations they have bought over the past decade that should outweigh any issues raised by Apollo, a relative newcomer to the broadcast business.

“I guess they cast a larger shadow,” he said. “Look, this is our deal. To say this is about Apollo is almost like shading Deb and myself. I just don’t understand it.”

In particular, Kim said he was surprised by the petition filed by Graham Media Holdings, which was concerned about the possibility that Standard General and Apollo’s Cox Media Group would control four network-affiliated stations in Jacksonville, Florida, where Graham also owns a station.

Station owners rarely criticize other broadcasters’ deals, Kim said. “I’ve never seen a broadcaster file against another broadcaster,” he asserted. Other observers believed Graham's action was unusual if not unprecedented.

Kim was also taken aback by petitions from unions, including the NewsGuild and the Communications Workers of America. He said Standard General has worked well with unions. While the NewsGuild has just a handful of members at Tegna stations,  Standard General has said it doesn’t plan any newsroom cuts and McDermott sent a note to employees emphasizing Standard General’s commitment to stations and local news.

Also: Standard Media’s Deb McDermott Cites Track Record Amid Challenges to Tegna Deal

”We hope to dialogue with them and figure out what’s going on,” Kim said. If there was a problem between the union and Tegna, “we will hope to improve on any relationship in the past.”

Kim said he thinks some of the opposition to the Tegna deal is coming from parties interested in acquiring Tegna or some of its stations, rather than being about the public interest, and that Apollo’s involvement was just an excuse to criticize the transaction.

Apollo’s Role

“Look, this is our deal,“ he said. ”We own 100% of this company. Apollo is one of 12 banks and preferred financing sources. I don’t work for other people.”

Tegna was too big for Standard to buy by itself and Apollo wanted to buy some of the Tegna stations. Kim said that Apollo was involved in the bidding for Tegna before Standard General got involved. He said Standard General didn’t bring Apollo into the deal. 

“We’ve operated stations for years and years. People should know what they get with us,” he said.

“What they’ll get is a company with a minority owner, run by a woman, that’s committed to serving diverse communities,” Soo said. “We think that’s good business.”

Kim said he respects the regulatory process. “Large deals typically get a little bit more scrutiny from all parties,” he said. 

But other big deals — like Gray Television’s acquisition of the Meredith local stations — have sailed through in a matter of months without comment from the parties opposing the Tegna sale. Gray’s deal and Nexstar Media Group’s earlier acquisition of Tribune Broadcasting consolidated the industry, while Standard General’s would do the opposite because Tegna’s stations in Dallas are being sold to Apollo’s Cox Media Group. 

“I don’t see any real legal, regulatory or precedential reason” why the deal would not be approved, he said. “We specifically designed this deal so we weren’t asking for anything special. We’re not asking for any waivers. This is literally right down the middle of the fairway.”

Nevertheless, Kim maintains that the opposition hasn’t knocked Standard General off schedule. The review process is still “well within the bounds of  that we have both expected and allocated.” While calling himself “patient,” he said “We’re eager to get our work started. We have some really interesting plans which we’re also happy to share with regulators. This is an industry that needs to evolve, that needs to continue to push forwards, and we’re just looking forward to doing that.”

Still a Good Deal

Since Standard General agreed to buy Tegna in February, the stock market has plummeted and inflation has cast a shadow over an economy already weakened by the pandemic.

But Kim maintains paying $5.4 billion — or $8.6 billion including debt — for Tegna is a good deal.

“Absolutely,” Kim said. “We didn’t buy this to do a quick flip. We believe that broadcast television is at a crossroads and it needs to decide what it needs to be. But I think that the opportunity set is huge.”

The Tegna stations will benefit from being part of a private company unconcerned about quarterly earnings, Kim said. “That will actually give us a little bit of headroom and the breathing space a company needs to think about the future,” he said. “The industry requires some evolution. It can’t be locked into the past. And we think a private structure is the optimal way to get from point A to point B.”

“I think the future is bright for local video journalism,” he said. “Local content is more important than ever and something that’s free and ubiquitous is meaningful.” 

Kim describes Standard General as a “representative company.” 

“A representative company is actually the best company, because a company that most closely resembles its audience can deliver on its customer promise best,” he said.

The company’s staff should reflect its audience, management should reflect the team members and the board should reflect the management team, he said. “I’m not doing this to check a box,” he said. “It’s my strong belief that it’s good business.”

Kim noted that Tegna has faced some complaints from Black and Latino journalists in the past.

Community Access

“We’re going to solve this problem,“ he said. ”We’re going to outreach these groups and look at the situation on a station-by-station, market-by-market basis and make sure that we are representative and that local community voices are heard.”  

Kim said the company has a plan that looks a bit like the community access cable operators offer. Standard Media stations will find time to open their studio to community journalists and give them airtime. 

“We only use our tools some of the hours of the day,” he said. “So in the time we’re not using them, maybe we should open up some of those tools for the community so they can put up high-quality product on the air and increase the voices in our market. 

Kim said his relationship with TV started when he emigrated to the U.S. in 1980. “My parents didn’t know how to speak English and neither did I. I learned English by watching TV, watching Sesame Street and The Electric Company. I believe in the power of broadcast to do good for society. " ■ 

Rich Fickle joined the National Cable Television Cooperative in 2011 amid what was a trying time for the small cable operator buying collective.  After its former CEO left, there was a growing sentiment among smaller operators in the membership that their needs weren’t being met, and that larger players were dominating what had been started in 1984 as a way for small companies to band together, share ideas and buy equipment and programming with a single voice. It took some time, but Fickle and his team managed to turn the NCTC around and refocus the operation toward its original mission. Now after 10 years, Fickle told the NCTC board that he will step down before the end of the year, ending one chapter in his 40-year cable career, and perhaps opening a door to the next. Fickle spoke with senior content producer -- finance Mike Farrell about his legacy and plans for the future. An edited transcript follows. 

MCN: What brought this decision about?

Rich Fickle: It’s the longest job I think I’ve had, ever. I’ve worked for affiliated companies doing different things every three or four years, but I think this has been the same job  for 10 years. I guess maybe part of the answer is I always enjoyed tackling new things and changing the scenery a little bit to keep growing myself. But the other side of it is I think it’s healthy for this organization to also bring in a fresh perspective. As you get a little bit older you want to give a little bit of a different allocation of time for work versus other things. I felt like I was less willing to put in the 60-70 hours a week for certain things than probably should be in this role. So I said, ‘I need more flexibility and time.’ 

I’m still hoping to stay engaged in some way with the industry, but that’s a marketplace kind of opportunity. If it doesn’t happen, I’m OK with that too. 

Is this a retirement for you?

RF: I don't think it will be. It could be? It’s kind of like you’re going through a door and you really have very little idea of what’s on the other side of it. I committed to staying engaged through the end of the year. The reality is I think they’ll find a replacement within a few months. And then I’ll be helpful to that person for some period of time -- maybe a couple of months -- and then just kind of be available for the rest of the year.

It’s sound like this is something you’ve been thinking about for awhile.

RF: There wasn’t any disruptive, conflicting or change-of-life condition. I think it’s just my DNA. I kind of want to not do the same thing in one place forever. I value the learning and challenges of new environments and various things to put effort into. I think I’m happier doing that. Some people are happier knowing what they are going to do every day, and it’s very predictable. I’m just not one of the ones to do that. 

When you joined 10 years ago, NCTC was in a little bit of turmoil and there were questions concerning which direction it would take. But you seemed to bring a sense of stability pretty quickly to the organization. 

RF: I don’t know if I can opine on what I did as opposed to what a lot of others contributed. Let me answer it this way: I would say, yes, 10 years ago there were some distinctive challenges. There was a board that wasn’t as unified as it is today. You had members on the board that contained representations from some very large MSOs and some very small MSOs. And there seemed to be a lack of unity because they have some different views, are from different worlds that are pretty dramatic. You want some of that, but you have to have a balance there. That was one issue. I think the other part of it was there were certain parts of engagements with the other parts of the industry -- CableLabs or SCTE or even the other associations like those that represent the telco or fiber based providers -- that felt alienated in their relationship with the NCTC. I can't go into the story of why that happened, but one of the things we tried to do was change that, because the industry has always been  stronger when people are working together.  

The other notable shift that we tried to incorporate fairly quickly, is that the members [and] organizations had to feel like they were not disenfranchised. Small ops felt like the NCTC may have changed allegiance to focus just on the large companies. We worked hard to try to rectify that. Some of that is just the perception, because there’s a void in communication that creates those impressions sometimes of not being important anymore. But there was some reality to it as well.

The membership was a little bit unsatisfied, or feeling like this is no longer the co-op they remember. There's those things that were almost immediate challenges. Financially, there was probably a different mindset around how to manage the balance sheet. A long time ago I was a CFO and it’s just kind of ingrained in me that if you have an organization, you’ve got to  have to have a bit of staying power for opportunities and rainy days. So we had to do some work-throughs.

The plus is that the co-op was founded on a very solid foundation of a true cooperative spirit with entrepreneurial  independent companies wanting to collaborate and an employee base that had a really clear mission about trying to help small and medium sized operators really be successful. And that mission is very well ingrained and people love getting up in the morning feeling like they contributed something meaningful. Those types of things, the member mission, the spirit of the co-op, the entrepreneurial mindset, was so strong that it helped us make changes relatively quickly because there was that common ground. It’s been a good team that contributed that. We’ve had fantastic board members. We have 14-to-15 of them at any given time, so it’s a large board. But after that first year, we had a board that was much more unified. That creates a whole different dynamic because you can become so distracted by governance that is in conflict that it ripples through everything you do. I feel for the last nine years we’ve had a really, really good, supportive board. 

And we’ve had a lot of fun too. We decided to step up our game on the shows and open it up more; it was very limited attendance. We opened up the checkbook to bring in more talent, more events, because having people being able to enjoy each other's company and collaborate and build relationships is hard to measure but it’s foundational. I think it paid off. We all enjoyed that capability. COVID has kind of iced a lot of that for the more recent events, but we do want to go back to it. 

Let’s talk about the Independent Show. It seemed you were stepping things up when everyone else was stepping back.

RF: If you look at it from the larger cable operator perspective, their support of shows [and] things like that was huge dollars. They had to question themselves, the rationale for that investment, as they consolidated and grew bigger. But the NCTC group of companies hasn’t really changed that much. I think when I first joined there were roughly 700 companies, today we’re just north of that. Given the change of the last 10 years and we’re dealing with roughly 700 companies, that’s pretty amazing. We’ve had consolidation, we just keep adding new companies into the mix. There’s always been this fragmentation problem that we help solve by providing venues to help suppliers and other interested parties to work together.

The other change is the programming world has changed dramatically. The large programmers have consolidated, they have less of a need to attend shows, they’ve cut back on their affiliate staffs, but they still see value in attending, participating and supporting, which is great. The other thing we did is we expanded the scope of our supplier community to include a lot more technology partners. The size of that group of companies and the size of dollars flowing through the NCTC, I’m pretty sure, has doubled. We emphasized more of that in the last few years, and it’s growing at a very fast rate. 

As we shift more and more resources into broadband, we are not abandoning video and programming, in fact we’re growing there, but we made an intentional effort several years ago to be more tech friendly. Because a lot of the solutions that the large guys were getting behind from an R&D perspective were great for them, but it doesn’t work well for smaller markets. 

There's a divergence too. A lot of our companies come from different backgrounds. They  may be telco-centric, they may be municipalities, they may be new entrants coming from a whole different world based on fiber. But all of them have kind of taken a fresher perspective. They are early adopters of next generation network technology like fiber to the home, much more than some of the large guys that have had such huge investments in coax and DOCSIS technology. Fiber growth has fueled a lot of companies entering the business, because fiber is so powerful with broadband. Broadband seems to be a natural companion with video. Broadband is kind of the lead horse, but programming with video content is essential to customer relationships, especially in Tier 2 or Tier 3 markets. They kind of go hand in hand. We expanded and will continue to expand heavily in supporting the broadband side of that.

In the last few years, there has been an effort by the NCTC to help smaller operators that wanted to make the transition to broadband-only or at least broadband-mostly, more smoothly.

RF: You’re right, there are operators that want to transition to fiber. That’s interesting and a problem for a lot of these guys. A lot of the major fibercom providers didn’t know how to talk to cable operators, they were used to dealing with telcos maybe more than cable operators. We merged those worlds, or at least tried to help do that. So today we have five large providers of fiber technology and materials that we have done fairly good sized stocking deals with, because we know that area is exploding. We have a lot of capacity to serve members with that supply chain. We have three com deals with major providers of that technology, maybe have a fourth soon. And then we’ve done a lot on the DOCSIS modem side as well. That’s been there for a long time, but we also shifted more toward IP video support, we launched a key partnership with Plume around managed WiFi for the home, we’re going to do more of those types of things for the home network. We’ve got a circuit program now where we have multiple national carriers that supply circuits to our members. It’s a natural point of help for  members because we can aggregate those opportunities across the entire U.S. for them to have connectivity with different carriers and hopefully better terms. That program kicked off about a year and a half ago and it’s going well too. 

There’s more to come. Who knows what a successor will do, but we’ve got a road map of probably a half a dozen items that if we could do them today, we’d do them. There’s only so much time we have to work on things. But there’s a rich set of additional things we can do to help members, especially on broadband.

You’re also helping members with retransmission consent negotiations.

RF: I’m glad you brought that up, because programming and video is still pretty darn important. And if you look at the numbers we’ve actually been growing every year. How much programming we transact, on the retrans side specifically, we started with retrans deals that were tied to large cable network agreements. I think it was either ESPN or NBC that was the first because they had O&O retrans capabilities, that was probably five years ago. Just over three years ago, we did a handful of station group deals. We jumped into that pool. Then in this last round, we more than doubled that. Now retrans is a significant part of our portfolio of programming deals that we work on. These are tough. It probably is one of the biggest pain points for our membership base because of the cost of retrans and a lot of changes with programming content and station group consolidation. But it’s been very successful over the last two major renewal cycles to increase our presence on the retrans side. I suspect we will continue to do that. And I hope the station groups will see value in that too because we’re able to hopefully make it more sufficient for them to reach a large number of operators across the country.  

Even on the general programming side, last year we did 36 deals, some are renewals some are brand new, we still support entirely new networks. When I first joined the NCTC, we were lucky to get four deals a year done.  And we haven’t changed the size of the team that manages the programming side. [EVP of Programming] Judy Meyka came on a year or so after I came on. She’s done an incredible job of doing a lot of those transactions, she’s very effective, she’s built a good team. It’s really quite rewarding to see how much productivity we have on that side of the business.

One of the criticisms of the NCTC before you got there was that larger members could pick and choose which deals they did on their own and with the co-op, which some members saw as limiting your negotiating leverage. How did you change that dynamic?

RF: The way that structure worked created several problems, where larger members could almost sit at the table and see where the NCTC was going with certain deals and make decisions on whether they would pursue their own deal at the eleventh hour and even before that. That creates this uncertainty, not only for our membership and our negotiations, but think about it from the programmers’ side. The programmers were upset because they felt like ‘I have to negotiate twice with this large company, give them the benefit of seeing things coming through the NCTC and then that allows them to be more informed on their negotiation strategy.’ They felt like it was unfair. I actually agreed with them. 

It’s an imperfect world because you always have to provide choice to any member to do their own thing, and we still do that today. But we now have  structures in place that say, ‘If you want us to negotiate on your behalf, we can be effective if you commit to us today that that’s what you want to do.’ If you don’t want to commit to do that, that ‘s fine. Do your own thing, no hard feelings. But we didn’t have that before. 

So now we’re asking on major deals for members to be able to commit that they’re going to allow the NCTC to go through the negotiations. They’ll be a part of it, they’re not going to disrupt it, they’ll be supportive of it. And that has created a much, much more trusted process for both our side of the table as well as the content providers. And, yeah, there was a little bit of resistance or hesitancy to do that for various reasons, but it’s worked out.  

Do we still have large companies that still want to do their own thing for certain types of agreements? Yeah, but that’s OK. We’ve actually had more of our larger members rejoin some of our larger deals than we have the other direction where they exited on renewals. Our net track record is a positive in terms of large operators being involved in major programming deals.

We have to prove ourselves. We have to deliver value. We’ve never taken the approach that if you’re a member, you have to sign this secret oath that you’re going to do everything through the co-op. We feel like we have to earn it. If members don’t see the value in the short term and the long term of supporting that structure, then they probably shouldn’t be members. There are always situations where it does make sense for operators to consider doing a little something different for themselves. And that’s fine. 

With retrans and regular cable networks, you can go as a united front and say you represent however many millions of subscribers you represent -- at one point it was over 25 million.

RF: That depends on how you do the accounting on some of that, but that was when we had some very large MSOs involved. I always look at the level of participation as opposed to the theoretical level, how many subs are actually participating. I don’t think we ever had that number exactly from that definition. You had that number from the aggregate number of companies that signed a membership agreement. 

Can you say how many you represent now?

RF: I would say in general our larger deals probably hover anywhere from six to 10 million, which is still pretty notable in the world of consolidated companies and so forth. It could be a little less on certain deals, but that’s the general idea. 

Is it different when you’re dealing with retrans? Or do you just do national O&O deals?

RF: No, we’re doing the station group stuff. So you can think about large station groups like Sinclair and others. I think we make more sense for both sides if it's a large station group as opposed to one that only has a few stations and only affects a  few members. I think we are very focused on trying to help large station groups and large groups of  members that are part of that.      

We started off with the O&O stuff five years ago, a little bit over three years ago we did our first set of station group deals. This last round at the end of 2020, we essentially doubled the size of the station group deals.

Are you expecting that to grow?

RF: Yes. I think it’s been successful. It’s painful because they are hard deals. I think that most members see value in us helping them with that. And I think the stations see value in that efficiency as well. 

In 2017, you reached a deal for members with Mobi TV, which is going through a Chapter 11 restructuring, but it looks for now that the relationship will continue.

RF: Mobi has done a fabulous job for a lot of our member companies and it’s been embraced in a fairly quick way. Yes, Mobi is dealing with some financial issues. There are a lot of reasons for why that happened, but one of the most easily understandable ones is that they were counting on fairly high growth on their platform last year. They had been in the market long enough that a number of cable operators had been launched and the pattern for  operators to step on the gas and convert legacy video systems to Mobi seemed to be in alignment. So 2020 was supposed to be the growth year. 

COVID hit and cable operators found it very challenging to do anything that involved getting into the consumer home to switch out video systems. You combine that with the fact that the demand for broadband went through the roof in most of these markets, so operators had to reshift the resources to focus on that broadband growth and network reliability. Mobi, unfortunately, became impacted by that negatively. The growth just didn't happen. 

The good news is I think these operators are back in the saddle, trying to move forward to reignite their growth on Mobi deployments. But Mobi first has got to get through this financial restructuring and/or sales process. Chapter 11 activities are somewhat opaque. They’ve got a relatively short time to work through this and we’re very supportive of them and glad to help Mobi and/or other companies that are willing to help Mobi through investment. We’re super-supportive of them. I think our members have felt like they’ve done an excellent job. So we’re engaged, there are some areas I can’t talk about because of NDA stuff, but I can say that Mobi has been a super service and it’s been great for small operators and some of our large members as well.

Looking forward to the rest of this year, is there anything you want to do or accomplish before you hang it up?

RF: There are probably a lot of things I want to do but I probably will not get to do. Time seems to be slipping away faster than I thought. I guess it comes down to do the best I can to help the new CEO. If there are projects or things I can do to help them with after that, somewhere in that ecosystem, I’m glad to do it, but I feel like I’m probably more limited in terms of the impact I can have for the rest of the year, other than just making sure that we’ve got a really good direction set with the new person being there at the NCTC. 

Will you help with the search?

RF: We retained a search firm, Carlsen Resources, one of the best in the business. [They’ve] been working on it for a while now and I think have surfaced some good candidates.

Do you think you’ll have a candidate soon?

RF: I think so. I think the plan is to have somebody hired and in place maybe within the next six-to-eight weeks. Maybe it takes longer. Maybe it might be June before they actually can take all of the reins, but it is in that time frame. 

Is there anything you're most proud of during your time at NCTC, and is there anything you wish you could have done while you were there, but couldn’t? 

RF: Proud, in my book, it’s a team thing. I guess the pride is from the standpoint that member companies, in many cases suppliers, and our staff rallied to address challenges and also to seize opportunities. When I first started in the cable industry a long time ago, that was the norm. But as the industry evolved and large companies emerged, the cooperation with the industry was diluted. Larger companies had a mindset of their own R&D, their own capabilities, less willing to share. The experience at the NCTC, which I think we helped contribute more to in terms of building up that level of cooperation, is wonderful to see. Because it’s kind of the way I started my career in the industry and probably the way I'll be ending my career in the industry, which is seeing an uncommonly high level of cooperation for the common good of building a better business. How many times can you see opportunities like that? I feel very grateful.

On the wishful side, we have 700 companies and there are all types of ownership structures. Some are public but a lot of these companies are also third- or fourth-generation family-owned companies. The richness of the ownership and the people who lead those companies is amazing. My biggest regret is somehow I never seemed to make enough time to have developed more of those relationships in depth, because these people are amazing, 

If I had somehow a chance to do it over, I would try to figure out ways to shift time to be more with those folks. Just a personal thing, they’re just amazing people.  To hear the stories of all the challenges they had and running these companies successfully for years and years and years. 

Is that your advice for the next person that comes in?

RF: Yes. I regret not doing more of it. I think I did OK at it, but regret not doing more. I think it’s a foundational element of trust that is essential for a cooperative to be successful. People have to get to know you. And I think it's enriching in both directions.    

Perhaps in response to DirecTV’s comment that broadcast station groups “ransom” their content during retransmission consent battles, Raycom Media returned the favor, pointing out that the nation’s largest satellite TV service provider is hardly in a positon to cry poverty.

Raycom Media and DirecTV reached an agreement in principle on Sept. 7 regarding the broadcaster’s 43 stations in 37 markets mostly in the south. The deal was made after Raycom pulled its signals for the stations on Sept. 1.  In announcing the deal DirecTV thanked its customers for their patience, but added that “Raycom’s intentional recent blackouts of Dish, Cox and now DirecTV customers creates an even greater sense of urgency for lawmakers to  review and overhaul tis anti-consumer retransmission consent process once and for all.”

Raycom apparently took exception to that characterization and in a “fact sheet” sent via the National Association of Broadcasters Monday, pointed out the following:

• “DirecTV earned $2.3 Billion dollars in 2013, and their profits were up 14%, yet they profess to be ‘fighting to hold costs down for their subscribers.’
• DirecTV has removed stations from its lineup at least 12 times in the last 3 years as a negotiating and political tactic, including another broadcaster, just last week.
• Since our last agreement with DirecTV, Raycom Media has successfully negotiated more than 200 agreements without disruption to our viewers. That's a 99% success rate.
• In the history of our company only 3 providers have removed our stations from their system-DirecTV being one of them.
• Raycom Media looks forward to working with DirecTV to turn our agreement in principle into a final, fully-binding document. We fully support the terms both parties agreed to Sunday and hope DirecTV will too.”