The Federal Communications Commission (FCC) last week concluded its third round of comments concerning Standard General’s acquisition of Tegna. Despite continued concern from the deal’s opponents, Standard General believes the merger’s closing date isn’t far off, reiterating the $8.6 billion deal will “greatly serve the public interest,” per the company’s latest FCC filing.
In a press call to journalists, Soo Kim, Standard General’s managing partner and chief investment officer, didn’t disclose any details about talks with specific regulators, but he stated the dialogue is “ongoing.”
“We’re optimistic that we’re closer to the end and not the beginning,” he said. “We have a conversation going on, and the conversation is relevant because we’re all aligned to try to get to the final result.”
The update comes about a month after Standard General formally pledged not to cut journalism jobs for at least two years, further promising not to raise retransmission consent rates for its MVPD partners.
Several petitioners filed comments this month in response to Standard General’s statements, including NCTA, NewsGuild, Common Cause, American Television Alliance (ATVA) and Dish Network – which notably dropped four Standard Media stations from its TV lineup in November. Also this month, U.S. Senator Elizabeth Warren called on the FCC to block the deal.
Kim added while the Standard General-Tegna deal has been “subject to a deeper level of scrutiny than other recently approved major TV transactions,” the company remains confident that the transaction will bolster local journalism.
“We are heartened by the fact so many community groups, industry executives, other media owners and politicians have come out on the side that this deal and our ownership of Tegna is in the public interest,” he said. “I think it offsets some of the less positive comments that are coming from some of the other sides.”
Dish, for instance, argued the deal would allow Standard General and its Cox Media Group stations to "exploit provisions in their existing retransmission consent agreements with MVPDs that would allow them to immediately receive higher fees upon consummation of the transaction."
As for the current timeline, New Street Research predicts regulatory talks are likely to extend beyond the deal’s one-year anniversary on February 22. Should that happen, it will “cause a step up in the price” as well as “cause financial participants to walk from the deal.”
Standard General’s recent filing merely reiterated the company’s previous arguments, NSR’s Blair Levin noted, rather than “bringing the parties closer to conditions they can all live with.” The position of the U.S. Department of Justice, which also needs to sign off on the deal, remains uncertain.
“By virtue of the FCC moving forward, we believe the DoJ has already signaled to the FCC what it would like in terms of the collusion and information sharing issues,” Levin wrote in a note to investors. “If we are wrong and the DoJ comes in now with a request for something more substantial or significantly more time, that could cause a pivot in the process.”