Standard Media CEO Deb McDermott says she has a track record running TV stations. So does Soo Kim, founder and managing partner of Standard General, which agreed to acquire Tegna for $5.4 billion.
While the deal is being reviewed by the Federal Communications Commission, objections have been raised by Graham Media, unions and other groups concerned that newsroom jobs will be lost and about the influence of Apollo Global Management, which owns stations through Cox Media Group and is involved in the financing of Standard General’s bid.
Standard General responded to the FCC about those concerns, saying there are no plans to coordinate with Apollo.
McDermott has taken a more personal approach, writing a letter to employees assuring them that layoffs are not coming and pointing to investments Standard General has made to bolster the stations it has acquired in the past.
In an interview with Broadcasting+Cable, McDermott said she’s been through a number of station transactions before and that she wanted to reassure the people who work at the stations.
“I’m always about the employees and making sure they feel comfortable,” said McDermott, a member of the Broadcasting+Cable Hall of Fame. “My first reaction was we need to tell our employees what our plans are. So that’s what we did. There’s no reason not to.”
An example of the commitment to employees was not cutting pay during the pandemic.
“We’re committed to local news,“ she said. ”I have a journalism background. Soo Kim has strong feelings about journalism and our commitment to it and investing in it.”
Standard General pointed to its leadership as a key reason why the deal is in the public interest. “This is going to be a really special transaction because it creates by far the largest minority-owned and female-led TV broadcast company in the U.S., '' McDermott said. “This is really furthering the commission’s goals of increasing diversity in broadcast stations ownership and management.”
A majority of the Standard Media board will be women and half of the board will be minorities. “Soo Kim and I are committed to increase diversity, equity and inclusion across the business and we want to ensure that we reflect the communities we serve.”
The company will be better able to make long-term investments in the stations because it will be privately held and not bound by the pressure of making quarterly reports for Wall Street, she said.
McDermott said Standard Media takes a decentralized approach to managing stations. “The people at the television stations know what they need. If you hire good people, they’re going to do a good job,” she said. Rather than dictating from corporate, “we come in and we work with the people at the station to say, ‘What can we do to grow? Tell us what you think.’ Sometimes we bring in consultants to help, but they are a critical part of that growth.”
At KLKN, the company’s station in Lincoln, Nebraska, Standard General hired Kern Dant as general manager. He hadn’t been a GM before (his dad Steve ran the station in the ’90s and worked for McDermott at Media General). “We coached him and once he got his wings, I mean, he just flew. He is doing an amazing job for us during the pandemic.”
Early in the pandemic, Dant found out local schools couldn’t manage remote learning. He arranged to clear out the programming on one of KLKN’s digital channels and had lessons running every hour for three or four months. In the fall, when parents couldn’t attend their kids’ sports games, he put them on the digital channel as well/
“We’re not being paid for any of this,“ McDermott said. ”This is just the right thing to do. He’s serving his community.”
Soo and McDermott began working together when Soo invested in the bankrupt Young Broadcasting and merged it with Media General and LIN Media. They eventually sold Media General to Nexstar Media Group.
About the time LIN deal was closing, WISH Indianapolis was losing its CBS affiliation. “We went in with our SWAT team approach and found out they really hadn’t been preparing very well for being an independent,” McDermott recalled. About half the station’s journalists and photographers had left.
“We basically said that on Day One of being an independent, you’re going to be fully staffed,” she said. “We will take people from every television station we have and we’ll keep them here as long as you need them until you fill up the staff.”
As an independent, WISH added hours of news programming and grew its news staff. As a CBS affiliate, it was the No. 2 station in the market. As an independent, it was No. 3, which McDermott considers a success.
McDermott also recalled that when her management team got control of the Media General stations they pumped money into WFLA Tampa, investing in a multimillion-dollar weather system to do a better job monitoring hurricanes and covering storms.
“We do it over and over again so we can grow the company, but it’s the support we give the employees that is so important,” he said.
McDermott expects to find similar opportunities to help the Tegna stations. “We’ll analyze and look for opportunities,” she said. “We’ve never not found opportunities. There’s always opportunities to do things better, that can help grow the bottom line or grow audience. If we can’t invest money because it’s not the right time, then we figure out another way to grow it.”
While McDermott is aware of the headlines created by the objections to the deal, she said the process has been about the same as the ones she went through while doing mergers with Media General and LIN. “We’ve been through this a number of times.”
McDermott and Standard General also believe the broadcast business is changing.
“A lot of us have been doing the same thing for a long time,” she said. “We understand that this is a new world and we have to think differently. We have to understand our audiences like we’ve never done before. It’s becoming very fragmented and interests are very different and how do we manage that?”
New businesses will emerge, including some derived from the new ATSC 3.0 broadcast format. “That’s going to be a big opportunity for us down the road. We’re still working through all of that,” McDermott said. “It’s an exciting time and a challenging time but I’m looking forward to it. It’s what keeps the business alive. We have to look at how we can drive success from the future of how people watch television, and what other ways can we provide information and content to them.”
If the transaction goes through, McDermott’s work life will change. For the past three years, she’s mostly worked from home in Nashville with a 10-person corporate staff in temporary offices.
She’s planning to work out of Tegna’s suburban Washington headquarters in Tysons Corner, Virginia, but keep her Nashville home.
“We really haven’t gotten together on details about how we’re going to run corporate,“ she said ”They have a full corporate team over there. We’ll figure out how all that works.
“Washington is so beautiful,“ she added. ”I’ll enjoy spending some time there.” ■
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.
The smarter way to stay on top of broadcasting and cable industry. Sign up below.
Thank you for signing up to Broadcasting & Cable. You will receive a verification email shortly.
There was a problem. Please refresh the page and try again.