Station owner Graham Media has joined the opposition to Standard General’s acquisition of Tegna, filing a petition against the deal with the Federal Communications Commission on Wednesday that focuses on the effect the transaction would have on the Jacksonville, Florida, TV market.
Graham Media joins a group of unions and public interest groups asking questions about the role Apollo Global will play following the transaction. Apollo owns Cox Media Group and is involved in financing Standard General’s bid for Tegna.
The complaints are concerned that Standard General’s acquisition is structured to evade FCC rules and that Apollo will have influence over both CMG and Standard General in terms of cutting costs by consolidating their stations’ operations, selling advertising and negotiating retransmission agreements.
In response to requests for information from the FCC, Standard General has said it will not be coordinating with Apollo and that the new Standard General-Tegna company will advance diversity as a company controlled and run by minorities and women. Standard General also said it will be investing in local news and vowed not to cut jobs.
Graham Media’s petition mostly deal with the effect the deal would have in Jacksonville.
“The proposed transaction would dramatically alter the Jacksonville, Florida, television broadcast market, reducing competition and threatening the Jacksonville community’s access to critical local news and other programming,” said Graham Media’s petition, noting that it was named Station Group of the Year by Broadcasting+Cable in 2016.
Graham Media claimed that, if approved, Apollo Global and Standard General would own or operate all four major network affiliates in Jacksonville. Two network affiliates are currently owned by Tegna. Two are owned or managed by Cox Media Group, which is controlled by Apollo Global. Graham owns independent s WJXT-TV, the top-rated stations in Jacksonville, which is branded as “The Local Station,” and WCJW-TV, the CW affiliate.
The company urged the FCC to apply the public interest standard while reviewing the transaction to ensure competitive television broadcast markets and robust local programing.
Graham Media said it was “concerned that granting the transaction— and permitting two massive investment firms to own or control all four Jacksonville major network affiliates—raises two related public interest harms,” the petitions said.
WJXT will be competing with four major network affiliates all financed by Apollo. “The imbalance will harm WJXT’s ability to fairly compete for viewers, advertising revenue, and local talent,” Graham said.
Graham also said that the two Tegna stations already operate a consolidated newsroom in Jacksonville, as do the CMG stations.
“There is little reason to think that approving this Transaction and aligning the financial interests of all four network affiliates would reverse this trend or lead to increased investment in local news—and Applicants fail to make a persuasive showing that it would in Jacksonville. To the contrary, private equity firms focused on the bottom line are particularly driven to achieve economic efficiencies by consolidating programming resources—resulting in less, not more, investment in local news and other community programming.,” Graham said.
In its filing, Standard General has not specifically address its plans for the Jacksonville market, or how viewers there would benefit, Graham said.
“In assessing whether the transaction is in Jacksonville’s public interest, the Commission should carefully consider how that alignment could frustrate its longstanding objectives to ensure competitive television broadcast markets and robust local programming,” Graham said.
In a statement, Standard General said that the transaction “would create, by far, the country’s largest minority-owned and female-led TV broadcasting company in U.S. history, increasing diversity in broadcast station ownership and management.”
It added that in the past, Standard General has invested in news, both in terms of people and technology.
“Standard General will hold 100% of the common stock of Tegna and will have full governance and operational control of the company. The proposed transaction will not result in Apollo or Cox Media Group having any influence or control over Tegna,” Standard General said. “Apollo is providing a small portion of the financing – none of the twelve lenders, nor the five preferred providers involved in this deal will have any ability to influence Tegna operations or gain access to any competitively sensitive information.” ■
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Jon has been business editor of Broadcasting+Cable since 2010. He focuses on revenue-generating activities, including advertising and distribution, as well as executive intrigue and merger and acquisition activity. Just about any story is fair game, if a dollar sign can make its way into the article. Before B+C, Jon covered the industry for TVWeek, Cable World, Electronic Media, Advertising Age and The New York Post. A native New Yorker, Jon is hiding in plain sight in the suburbs of Chicago.