Nancy Pelosi, Frank Pallone Have Issues with Standard General-Tegna Merger

Rep. Frank Pallone Jr. (D-N.J.) and House Speaker Nancy Pelosi (D-Calif.) at a May Capitol Hill news conference.
Rep. Frank Pallone Jr. (D-N.J.) and House Speaker Nancy Pelosi (D-Calif.) at a May Capitol Hill news conference. (Image credit: Tom Williams/CQ-Roll Call, Inc via Getty Images)

Two of the top Democrats in the House have written the Federal Communications Commission to express their strong concerns with the Standard General-Tegna merger, which the agency is currently vetting per its mandate to ensure such deals are in the public interest.

Tegna, which owns 64 TV stations in 51 U.S. markets, agreed to be acquired by Standard General in February for $8.6 billion including debt. Tegna also owns multicast networks True Crime Network, Twist and Quest, as well as advanced advertising company Premion.

The FCC recently asked for more information about the deal's impact on jobs, local news, and retransmission consent.

Also: FCC Seeks Staffing Information on Standard General-Tegna

According to a copy of a letter provided to B+C dated Thursday (Oct. 6), House Speaker Nancy Pelosi (D-Calif.) and Senate Commerce Committee chair Frank Pallone Jr. (D-N.J.) have written FCC chair Jessica Rosenworcel asking her to “fully examine” the deal and the concerns raised by public comments, which they said are shared by “many of our colleagues in Congress.”

Those concerns, according to Pallone and Pelosi, include that the deal would restrict access to local news coverage, cut jobs and raise prices for consumers via increased retransmission consent fees to cable operators and other multichannel video programming distributors (MVPDs).

“By structuring the transaction to apparently trigger ‘after-acquisition’ clauses in retransmission-consent contracts, the proposed new owners of Tegna could immediately charge higher fees to pay TV providers, which may, in turn, be passed on to pay TV consumers,” they wrote Rosenworcel, saying the deal’s complicated structure would obscure the ownership of the stations, which would undermine localism, competition and diversity.

Cable operators have also expressed their concerns to the FCC about what they called the complex web of license transfers and spinoffs in the deal. They contend those transactions could prove a way to end-run the FCC’s ban on joint, coordinated, retrans negotiations by two stations in a market unless they are commonly owned, joint negotiations that can drive up the price cable operators pay for local TV-station signals. 

Among the principal opponents of the deal is NewsGuild-CWA, which has petitioned the FCC to block it and has asked President Joe Biden to request that the FCC block the purchase of Tegna TV stations by investment fund Standard General and Apollo Global Management, which is funding the deal and getting some stations in a spinoff side deal.

NewsGuild-CWA is the nation’s largest union representing journalists. But Standard General and Tegna executives have countered that they have no plans to cut news jobs, and point to a history of boosting local news output at their stations.

Standard General CEO Deb McDermott wrote Tegna news staff to tell them of the company's commitment to news and news jobs.

Those executives have also pointed out that the “complicated” structure would boost women and minority ownership of media, an FCC public-interest goal.

Standard General provided a lengthy rebuttal:

“Standard General’s proposed acquisition of TEGNA will yield significant public interest benefits without any countervailing public interest harms, including creating the largest minority-owned and female-led broadcast station group in U.S. history.  We were therefore disappointed to see the FCC petitioners enlist the involvement of Speaker Pelosi and Congressman Pallone by misleading them with the same false statements they have been making to the FCC.

“While the Pelosi-Pallone letter decries the UHF Discount, the Tegna transaction does not rely on the UHF Discount in any way.

[Editor's note: Dating from the pre-digital days when UHF signals were the weaker ones, the FCC only counts half a UHF station's audience reach toward its local ownership caps]

“While the Pelosi-Pallone letter complains of media consolidation, TEGNA will actually be smaller after the proposed transaction, creating the opposite of consolidation.

“While the Pelosi-Pallone letter repeats the petitioners’ claim that Standard General will supplant local news content with news produced in DC, there is utterly no support in the FCC record for that claim and Standard General has made clear in the record that it will not.

“The Pelosi-Pallone letter speculates that Standard General will cut station jobs at Tegna, when in fact Standard General made a commitment in the FCC record that it was not planning any such actions — a commitment no prior FCC broadcast station applicant has ever made.

“The Pelosi-Pallone letter falsely claims that Standard General stated several years ago that TEGNA has “too many employees,” when in fact, Standard General publicly protested TEGNA’s furlough of employees during the pandemic.

“The Pelosi-Pallone letter speculates about the influence of foreign ownership, when 100% of the voting shares and the right to appoint the entire TEGNA board is held by a U.S citizen.

“The Pelosi-Pallone letter speculates about ‘price increases on American families’ when TEGNA, as a broadcaster, makes its content available to the public for free over-the-air. Only cable companies decide what price their own subscribers pay.

“We are therefore very disappointed to see the petitioners’ package of misstatements at the FCC being used to also mislead our elected representatives into applying improper pressure upon the FCC.    

“Soo Kim [who heads Standard General] and Deb McDermott have a proven track record of enhancing stations’ service to their local communities, increasing local news output, and investing in the resources that stations need to compete successfully. Standard General has increased newsroom staffing at its current stations by 28% since acquiring them in February 2021, while, in comparison, the employee headcount at other major broadcasters, including Tegna, dropped during the pandemic. Soo Kim and Deb McDermott are committed to bringing that same dedication to competition and localism to the Tegna stations, creating the largest minority-owned and female-led television station group in U.S. history and dramatically increasing minority broadcast ownership and viewpoint diversity.

“The proposed Tegna transaction complies with all FCC rules without the need for any waivers, divestitures, or special treatment. Standard General seeks nothing from the FCC other than to be treated in the same fashion as other applicants whose transactions were promptly approved in the past two years, including Gray’s acquisition of Meredith, which, unlike the Tegna transaction, involved a station divestiture to comply with FCC local ownership rules, and Scripps’ acquisition of Ion, which involved the divestiture of 23 stations to meet FCC ownership limits. The Gray-Meredith transaction was approved in less than six months and the Scripps-Ion transaction was approved in less than three months. The Tegna transaction has been under review at the FCC for almost nine months at this point, and the time has come to approve the transaction and unleash an almost 300% increase in the number of minority-owned TV stations in the U.S., bringing badly-needed diversity to the nation’s broadcast station ownership.

 "We continue to work collaboratively with FCC staff in their review of the proposed transaction.”

Said NewsGuild of the letter: “NewsGuild-CWA members are thankful that Speaker Pelosi and Chairman Pallone have joined us in calling on the FCC to scrutinize the takeover attempt of Tegna, one of the largest producers of local TV news,“ the guild said of the letter. “Hedge fund Standard General, backed by anonymous investors located in the Cayman Islands and elsewhere in the world, will treat Tegna as just another part of its portfolio of casinos, cruise lines and other non-media properties. ■

Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.