Appeals court rules FCC doesn’t have to vote on Standard General merger

Standard General said that an appeals court’s decision not to force the Federal Communications Commission (FCC) to vote on its merger with Tegna was “tantamount to denying the transaction.”

As the Taxpayers Protection Alliance previously reported, Standard General is making a $8.6 million bid to acquire television operator Tegna, which would create the largest minority-owned, female-led media company in the U.S. But the FCC, with Democratic leadership that has a clear antitrust agenda, has taken a hands-off approach with the issue. The FCC’s Media Bureau sent the review of the possible acquisition to an administrative law judge rather than to the full commission for a vote.  

The D.C. Circuit said in its ruling that Standard General didn’t show that the FCC “has unreasonably delayed in action on their applications” or that the commission has a “crystal clear” duty to vote on the application without a hearing. The proposed merger has been stuck in regulatory review at the FCC for more than a year.

Standard General made clear its intentions that it would waive its contractual rights to apply after-acquired retransmission rates to the Tegna stations and committing to maintain current newsroom staffing for a minimum of two years. Tegna manages 64 broadcast stations and two radio stations in 51 markets in the U.S. Despite Standard General submitting a series of binding and enforceable commitments to regulators, the FCC said the “proposed transaction could artificially raise prices for consumers and result in job losses.”

Last month, prior to the appeals court ruling, Standard General announced new commitments that included no newsroom layoff for three years and plans to establish a $5 million local journalism grant fund.

“The commitments announced today underscore the strong, good-faith relationship between Standard General, organized labor and the American public,” said Soo Kim, the fund’s founding partner. “The only obstacle to this deal moving forward is the Federal Communications Commission refusing to hold a vote on the deal.”

But the efforts may be all for naught, as financing on the deal runs out May 22. 

Blair Levin, a policy adviser for New Street Research who is a former FCC chief of staff, said the appeals court’s action kills the deal.

“While there may be various appeals and while the Administrative Law Judge proceeding is moving forward, we view the matter as largely closed, as none of those routes are likely to result in the transaction being approved before the May 22 deadline for the financing commitments,” he said.

Johnny Kampis is director of telecom policy for the Taxpayers Protection Alliance.