Standard General, Tegna Seeking FCC Review of Merger Review Order
Motion raises questions of constitutionality, jurisdiction
Standard General, Tegna and Cox Media Group have signaled Friday that they are filing a motion with the FCC asking that the full commission review an order by the Media Bureau designating that an administrative law judge should hold a hearing on Standard General’s proposed acquisition of Tegna.
Standard General and Tegna argue that the delay caused by the hearing would kill the deal before a ruling could be made.
The motion raises constitutional issues in the case as well questions about whether the Federal Communications Commission has jurisdiction to bar a transaction for the reasons cited by the Media Bureau.
Standard General agreed to acquire Tegna more than a year ago and the review of the transaction has been much longer than the FCC’s usual procedure.
“Time is of the essence,“ the motion says. “As set forth in the documents filed with the Media Bureau and as has been publicly announced, the ‘Final Extension Date’ of the Standard General-Tegna merger agreement is May 22, 2023. That deadline will come and go long before a full evidentiary hearing could be completed.
“The Applicants have no ability to extend that deadline. If the FCC 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. The Media Bureau’s decision to issue the HDO is therefore not just tantamount to denying the transactions at issue in this proceeding without having to reach a decision on the merits, it is absolutely a denial without due process.”
The motion questions whether the constitution allows an administrative law judge to make decisions regarding the merger. It argues that the separation of powers is being violated because the president cannot fire the judge.
It also questions whether or not the possibility that the merger could result in either higher prices because of rising retrans fees or the elimination of newsroom jobs violated the public-interest standard. (Standard General has pledged not to raise rates or fire staffers.)
“The full Commission has never suggested that a reduction in a station’s staff is contrary to the public interest if conducted in a nondiscriminatory manner. Nor does the Commission possess statutory authority to do so,” the motion argues.
The motion notes that objections to the merger are coming mainly from two sets of petitioners — The NewsGuild-CWA and Common Cause — and argues that the Media Bureau hasn’t given appropriate weight to the 40 parties that have filed in support of the public interest benefits of the transaction.
The Media Bureau procedures have also been criticized by two of the four sitting commissioners, former chairman Mark Fowler, former commissioner Michael O’Rielly, and the president and CEO of the National Association of Broadcasters, according to the motion.
“The Media Bureau’s deviation from established Commission practices clearly warrants the Commission’s intervention and correction, and at least presents multiple substantial disputes that the full Commission must resolve immediately,” the motion says. ■
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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.