NewsGuild Urges Review of Apollo Financing of Tegna Buyout
Union concerned about ‘erosion of local journalism’
The NewsGuild, a union representing journalists, is raising questions about Apollo Global Management's role in financing Standard General’s proposed $8.6 billion acquisition of Tegna that it thinks the Federal Communications Commission and the Department of Justice should consider before approving the deal.
The union, part of the Communications Workers of America, said its first concern is further erosion of local journalism and newsroom jobs being lost. It noted that as private equity firms have acquired newspaper companies, they have eliminated the jobs of thousands of journalists.
“What will it mean to the future of local journalism if private equity firm Apollo finances the acquisition of Tegna?,” NewsGuild president Jon Schleuss asked in a post on the union’s website Friday. ”Will it use its financial position and influence to fire local broadcast journalists around the U.S.”
Also: Standard General Says Change Will Be Good for Tegna
Schleuss also questioned why Tegna’s new owner is asking the FCC for waiver of its foreign ownership rule. He argues that in order to obtain a waiver it should make a commitment to preserve local journalism.
In addition, he notes that Apollo itself is a station owner and that the deal appears to be structured to avoid broadcast-ownership caps.
“How do Apollo’s major debt and equity investments totaling over $1.7 billion not lead to shared ownership or control of Apollo’s and Tegna’s stations, resulting in far more than 39% national coverage? Does the debt include rights to acquire Tegna stations in the event of a default, which again would violate the 39% cap? Do current market conditions, including inflation and supply chain problems, raise the risk of such default? Do the equity investments include governance rights of any kind, or terms and conditions that would increase Apollo’s influence over time? And even if the applicants argue that their deal meets the letter of the law, does the proposed structure lead to de facto control by Apollo and the violation of the spirit, if not the letter, of the 39% cap,” Schleuss wrote.
Finally, Schleuss asked if the transition will raise consumer prices as the newly acquired Tegna stations seek higher retransmission fees from cable and satellite distributors. ■
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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.