The Standard General-Tegna merger has stumbled across another obstacle as the Federal Communications Commission on Friday issued a hearing designation order, sending questions related to the pending deal application to the commission's administrative law judge (ALJ) for review.
The additional review, according to FCC Chairwoman Jessica Rosenworcel, will allow the FCC to make “a more informed assessment on whether proposed safeguards are sufficient to protect the public interest.”
“That’s why we’re asking for closer review to ensure that this transaction does not anti-competitively raise prices or put jobs in local newsrooms at risk,” she said in a statement.
In the order, the FCC Media Bureau said the hearing will determine whether the transaction was intended to increase retransmission fees and if it’s likely to increase rates for MVPD subscribers. The Media Bureau will also determine if potential harm to the public interest would be “adequately mitigated” by the formal commitments Standard General made in December.
The FCC’s move provides further uncertainty to the $8.6 billion deal, which has been in the works for over a year. The news came mere days after Standard General disclosed that the U.S. Department of Justice did not mount any challenges against the deal.
Such a designation has put a stop to similar mergers. Back in 2018, the FCC called for a hearing for Sinclair Broadcast Group’s proposed purchase of Tribune Media. Just a few weeks after the hearing’s announcement, Tribune Media terminated the deal. Nexstar Media Group later bought Tribune Media for $6.4 billion.
Under the terms of the merger, Standard General would purchase Tegna, which currently operates 64 stations in 51 markets. Apollo Global Management, owner of Cox Media Group, is involved in financing the deal.
The Standard General-Tegna deal was initially set to close at the end of 2022, but the FCC in December requested another round of comments after Standard General pledged not to cut journalism jobs for at least two years or raise retransmission consent rates for MVPD partners.
Standard General’s Soo Kim told reporters in January talks between agencies were ongoing and the company was confident that “we’re closer to the end and not the beginning.”
Parties that have voiced concerns about the deal include American Television Alliance, Common Cause, the CWA’s NewsGuild and NABET labor unions and NCTA.
FCC Commissioners Brendan Carr and Nathan Simington spoke against the Media Bureau’s decision to hold the hearing. They noted many local TV stations in the country are trying to expand their news gathering operations.
“At this moment, the FCC should be working to encourage more of the investment necessary for these local broadcasters to innovate and thrive,” stated Carr and Simington. “It does the opposite today. After a protracted, nearly yearlong review, the Commission should be providing the parties with a decision on the merits—not an uncertain future.”