A Federal Communications Commission (FCC) administrative law judge has upheld a hearing designation order issued by the agency over concerns related to Standard General’s proposed acquisition of local television broadcaster TEGNA.
The judge, Jane Halprin, rejected claims made by Standard General and TEGNA that the FCC’s hearing designation order exceeded its authority and violated the U.S. Constitution. The companies had requested the matter be scrutinized before the full FCC panel, rather than an administrative law judge.
Last month, the FCC’s Media Bureau said it was unable to determine whether Standard General’s proposed purchase of TEGNA — which is backed by hedge fund Apollo Global Management and comes with a price tag of over $5 billion — was in the public interest. The Media Bureau also expressed concern that allowing TEGNA to be acquired by Standard General would essentially put the company under common ownership with Cox Media Group, which had the potential to stifle competition in the broadcast television space in a number of communities.
“A transaction of this magnitude has great potential to affect viewers, consumers and local communities, and it is incumbent upon the Bureau to fully understand the impact of the transaction before it decides whether to approve the [deal],” officials with the Media Bureau wrote in its order for a hearing last month.
Executives at Standard General and TEGNA say the proposed deal will help the combined company remain more competitive, save jobs and allow it to invest more in local news and community programming. It also said the FCC’s Media Bureau lacked the authority to send the matter to an administrative law judge, something public interest groups backed by broadcasters have echoed.
“NAB is alarmed by the FCC Media Bureau’s decision to designate for hearing the Standard General-TEGNA merger after a needlessly prolonged process and on the basis of issues outside the Commission’s purview,” Curtis LeGeyt, the CEO of the National Association of Broadcasters (NAB), said in a statement sent to The Desk late last month. “While NAB takes no position on the merits of the transaction, nothing about the hearing designation required substantially exceeding the FCC’s self-imposed 180-day shot clock. The long delay, and now hearing designation, will likely lead to job losses and other damaging cost-cutting measures by the local stations involved to account for the extreme expense of managing the FCC’s unwieldy process.”
On the opposite side, the NewsGuild — which represents journalists, including some in the broadcast industry — has come out against the merger, as did the National Association of Broadcast Employees and Technicians. Both unions are part of the Communication Workers of America. The decision this week by the administrative law judge to proceed with the hearing was seen as a partial victory for them in their efforts to ultimately block the deal.
A spokesperson for Standard General said they were disappointed by the decision on Thursday, and felt it to be erroneous. To that end, both sides are still pursuing the merger.
“We remain committed to seeking all available avenues to both vindicate our rights, and promote the public interest which is best served through a full commission vote to approve this transaction which any three commissioners can request,” the spokesperson said. “We urge the FCC to act swiftly, since — in this matter — a decision delayed is a decision denied.”