Standard General, Tegna and Cox Media Group on Friday formally filed an application asking the Federal Communications Commission to review its Media Bureau’s decision to have a administrative law judge hold a hearing on Standard General’s pending acquisition of Tegna.
Standard General agreed to acquire Tegna more than a year ago and the transaction has been stuck in regulatory review ever since. Standard General and Tegna argue that further delay will unlawfully kill the deal, as its financing runs out on May 22.
“Today, we filed a formal Application for Review with the FCC regarding the Media Bureau’s hearing designation order, which threatens to torpedo our effort to build a company that will expand investment in local news, protect local news jobs and create the nation’s largest ever minority-owned, female-led broadcast television company,” Standard General said in a statement.
Also Read: Tegna Stock Plunges After FCC Sends Standard General Deal to Judge
“As we have made clear previously, our applications comply with all FCC rules and deserve a vote by the FCC commissioners, which any three commissioners can request,“ Standard General said. “Instead, the Media Bureau’s order is endangering those public-interest benefits through a transparent effort to exercise an unlawful, unprecedented and indefensible pocket veto.”
In their petition, Standard General and Tegna have argued the transaction will created a minority-owned company and expand local reporting and programming.
The Media Bureau action “is not only unnecessary and unfair — it is unlawful,“ the petition reads. “The Communications Act, the Commission’s rules, and an unbroken chain of precedent require grant of the applications. The Commission has a clear obligation to intervene to prevent the Media Bureau’s disparate treatment of the applications from depriving the public of substantial benefits of the transactions while damaging both Tegna and the entire broadcast industry’s future access to investment capital and financing, all to the great harm of the public.”
Standard and General also argued that contract to the Media Bureau’s finding that there were substantial and material question of fact, “challengers failed to present any competent evidence creating a substantial and material question on any relevant fact at issue.”
The petition also asserts the Media Bureau cannot use the potential for increased retransmission consent fees or the loss of journalists’ jobs as criteria to deny approval.
Standard General has pledged not to increase retrans fees or cut newsroom jobs as part of the review process.
According to the petition, it is also unconstitutional to send the deal to an administrative law judge who cannot be removed by the president.
“Time is of the essence,” the petition said. “As set forth in documents applicants filed with the Media Bureau, the ‘Final Extension Date’ of the Standard General-Tegna merger agreement is May 22, 2023. That deadline will pass long before a full evidentiary hearing could be completed, and applicants have no ability to extend that deadline.
“If the Commission fails to grant the Applications before that date, the financing obligations of more than a dozen lenders helping to fund the transactions will expire as well,” Standard General continued. “The hearing designation order in effect denies the applications without basis and without due process. The Commission should swiftly correct that overreach. If the Commission has not done so by 5:00 p.m. on March 27, applicants will have no choice but to seek judicial relief.” ■
