The Desk appreciates the support of readers who purchase products or services through links on our website. Learn more...

Standard General files lawsuit against FCC over TEGNA deal

The front of the Federal Communications Commission building in Washington, D.C. (FCC public domain image)
The front of the Federal Communications Commission building in Washington, D.C. (FCC public domain image)

Hedge fund Standard General has filed a lawsuit against the Federal Communications Commission (FCC) for referring a potential merger with broadcaster TEGNA to an administrative law judge.

The lawsuit, filed in federal court on Tuesday, argued that the FCC’s decision to send the merger to an administrative hearing was “an unprecedented and legally improper maneuver,” one that has further delayed the proposed transaction between Standard General and TEGNA.

TEGNA announced its intention to be acquired by Standard General last year in a deal valued at $8.6 billion, including debt. The deal would give Standard General control of TEGNA’s 64 stations across more than 50 metropolitan areas, minus any stations that are divested in order to satisfy regulatory scrutiny. The deadline for the transaction to be completed is this May.

After months of public comment on the matter, the FCC’s Media Bureau decided to refer the merger to an administrative law judge in January after the agency said it was unable to determine if the merger was in the public interest. It came amid criticism from lawmakers, public interest groups, journalism unions and others who warned that Standard General’s control of TEGNA and its stations would result in a concentration of power.

One point of contention involves how the deal is structured: Standard General partnered with investment firm Apollo Global Management for the TEGNA deal. Apollo owns a stake in Cox Media, which competes with TEGNA in Seattle and Atlanta.

For its part, Standard General and TEGNA argue that the deal will lead to a greater investment in local news and community-oriented programming, one that preserve jobs and create new ones. Conversely, if the deal doesn’t go through, both sides warn that jobs will likely be lost.

Standard General now argues that the Media Bureau’s decision to submit the matter to an administrative will further delay the transaction. That delay will almost certainly mean the outcome of the deal would not be decided by the May deadline, effectively killing the transaction.

On Tuesday, Standard General asked the federal court in Washington, D.C. to expeditiously review the FCC’s decision to submit the matter before an administrative law judge.

“The Media Bureau repeatedly delayed the license-transfer applications and, on February 24,  2023, ordered a hearing before the Commission’s administrative law  judge that cannot be completed before the financing underpinning the  transaction expires on May 22, 2023,” Standard General wrote in its complaint. “The hearing ordered by the Media Bureau pursuant  to delegated authority is unconstitutional and otherwise unlawful on  multiple grounds, and its purpose and effect is to deny the applications.”

Standard General has asked the court to “reverse the hearing order and remand to the agency with instructions to grant the applications.”

Photo of author

About the Author:

Matthew Keys

Matthew Keys is the publisher of The Desk and reports on the business and policy matters involving the broadcast television, streaming video and radio industries. He previously worked for Thomson Reuters, Disney-ABC, Tribune Broadcasting and McNaughton Newspapers. Matthew is based in Northern California, has won numerous awards in the field of journalism, and is a member of IRE (Investigative Reporters and Editors).