The Death of the Tegna Deal *

Standard General’s $8.6 billion acquisition of Tegna appears likely to die after the U.S. Court of Appeals for the D.C. Circuit denied the company’s petition to force the FCC to vote on the deal. Soo Kim, the founder of Standard General, expressed disappointment, frustration, and chagrin over the decision, stating that the financing assembled for the transaction expires on May 22 with no extensions or new money coming in to rescue the deal. Kim further claimed that during the lengthy renewal process, no one informed him of any defects in his application to own the Tegna stations that needed to be fixed to achieve approvals. Kim also alleged that no other deal has been subjected to a similarly prolonged and mystifying process.

In its ruling, the D.C. Circuit found that Standard General did not demonstrate that the FCC "has unreasonably delayed in acting on their applications." It is unclear if the government understood that Standard General’s financing was crucial and created a real deadline for completing the deal. By designating the transaction for a hearing by an administrative law judge just three months before that financing expires, the FCC’s Media Bureau effectively ended the deal.

The Media Bureau’s decision marked the first time ever a TV sale was designated for a hearing, and it was unusual because the bureau did not alert the commission it was taking that action. Kim said that process was also unusual because Standard General was never told what was wrong with its proposal or how to fix it. “All we have ever asked is for our application to be treated like others,” Kim said. Instead, he claimed the process was like something out of Animal House, with Standard General being put on “double secret probation” without being informed of any wrongdoing.

Sen. Ted Cruz (R-Texas) and Rep. Cathy McMorris Rogers (R-Wash.) have written to FCC Chair Jessica Rosenworcel, expressing concerns about the agency’s handling of the Standard General-Tegna review. The letter raised concerns about accusations that the transaction was being blocked because Kim is a minority. Kim said this situation allows the government to decide who is acceptable as a buyer of news, which he claims is a scary thought.

H/T B&C