Nancy Pelosi Tells FCC She Has Concerns Over Local News Impact With Sale Of Tegna To Standard General

Standard General’s proposed acquisition of Tegna is facing new scrutiny from Capitol Hill, as House Speaker Nancy Pelosi and House Commerce Committee Frank Pallone fired off a letter to the FCC expressing their concerns about the transaction.

Standard General, however, said that the lawmakers were being misled by opponents of the transaction, who include public interest groups and the NewsGuild CWA, and that Pelosi and Pallone’s letter was applying “improper pressure” to the FCC.

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Under the terms of the transaction, an affiliate of Standard General would purchase Tegna, which has 64 stations in 51 markets. Apollo Global Management, owner of Cox Media Group, is involved in financing the deal. Following the close of the transaction, Cox will acquire Tegna stations in Austin (KVUE), Dallas (WFAA and KMPX) and Houston (KHOU and KTBU) from Standard General.

In the letter to FCC Chairwoman Jessica Rosenworcel, Pelosi and Pallone focus in part on the impact the transaction would have on local news, as lawmakers of both parties have in recent years decried the decline of media outlets in their districts as advertising dollars migrate to tech platforms.

“After reviewing the public record, we are concerned that this transaction would violate the FCC’s mandate by restricting access to local news coverage, cutting jobs at local television stations, and raising prices on consumers,” Pelosi and Pallone wrote.

“The proposed new owners previously told investors they believe Tegna’s local stations have too many employees, a potential signal of their intent to lay off local journalists,” they wrote.  “At the same time, they have described piping in news produced in Washington, D.C., to fill time on local newscasts as a public interest benefit, potentially leading to fewer local journalists and less local news.”

Read the full letter here.

The NewsGuild also weighed in again, saying that the Standard General “backed by anonymous investors located in the Cayman Islands and elsewhere in the world, will treat Tegna as just another part of its portfolio of casinos, cruise lines and other non-media properties.”

An FCC spokesperson said that they are reviewing the letter but do not comment on pending transactions. What complicates things for Standard General is that the transaction needs the commission’s affirmative approval to get the FCC’s greenlight. The commission currently has a 2-2 partisan split. (The nominee to fill the commission’s fifth spot, is currently stalled in the Senate).

The merger is nearing the end of a 180-day timeline that the FCC keeps for the review of the transaction.

Standard General issued a lengthy rebuttal to the letter, claiming that opponents “package of misstatements at the FCC” was “being used to also mislead our elected representatives into applying improper pressure upon the FCC.”

The company argued that the company, led by Soo Kim and Deb McDermott, will be the largest minority-owned and female-led broadcast station group in history, as broadcast diversity remains a primary FCC concern. The company said that it has “made it clear” in the record that it will not replace local news content with generalized D.C. content, and that it had “made a commitment” in the FCC record that it “was not planning” to cut station jobs. It also said that it actually protested Tegna’s furlough of employees during the pandemic, and that the transaction involved the sale of free, over-the-air stations, pointing to cable operators as the ones responsible for price decisions.

Standard General also countered the claims of foreign ownership influence, contending that 100% of the voting shares and the right to appoint the entire Tegna board is held by a U.S. citizen.

The complete response is here.

It’s not uncommon for members of Congress to urge the FCC to closely scrutinize mergers or raise major doubts about them, but unusual for the speaker to do so. The decision on whether to move to block such transactions is left to the commission.

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