There will now definitely not be any action from the Federal Communications Commission's administrative law judge (ALJ), on Standard General’s acquisition of station group Tegna deal before the plug is expected to be pulled on its financing.
That’s because that ALJ, Jane Hinckley Halprin, has suspended her review “until further notice” after holding a status conference.
At that conference, Standard General and Tegna requested action and a decision before May 17 — given that there is a May 22 deadline for financing a deal announced more than a year ago — so it had asked for resolution in less than three weeks.
Challengers to the deal, which include The News Guild-CWA/National Association of Broadcast Employees and Engineers (NABET)-CWA, the United Church of Christ Media Justice Ministry and Common Cause, had called instead for a year-long review before such a decision.
Also Read: Standard General Flags Fans of Tegna Deal
The presiding — and only — FCC ALJ, Halprin concluded that it would not be possible to do the requisite fact-finding and discovery for the review before that deadline. The FCC’s Media Bureau, in issuing the designation order, had indicated that more information was needed. Halprin said that since the deal may crater before such a review could be completed, why put the parties through the motions — literally and figuratively — “when the underlying transactions might not survive past May 22, 2023.”
Standard General has been trying to acquire Tegna’s 64 TV stations and other assets for most of a year, but the FCC’s Media Bureau designated the deal for a hearing before an administrative law judge, saying the agency needed to weigh in on “material concerns in the record related to how the proposed transaction could artificially raise prices for consumers and result in job losses.” Standard General has offered a number of pledges to try and assuage those concerns, but to no avail, if the designation is any indication.
Standard General agreed to acquire Tegna in an $8.6 billion deal that includes the assumption of $3.2 billion in debt. Apollo Global Management (AGM) is providing some of the funding for the deal. AGM controls Cox Media Group, which will own some of the Tegna stations if the deal is approved.
“As we have said for months, the FCC Media Bureau’s decision to designate the applications for hearing was a deliberate move to kill the transaction rather than to assist in making a decision," Standard General said in a statement. "At any point between now and May 22nd, the FCC has the ability to override the Media Bureau’s deeply flawed Hearing Designation Order and bring this deal to a vote. We urge the FCC to listen to the countless bipartisan voices calling for a vote and fair treatment of the applicants.”
“The ALJ’s decision just confirmed what we have thought since the Media Bureau announced the [Hearing Designation Order],” NewStreet Research’s Blair Levin said in a note to investors. “[O]verturning the order through a legal process would face very long odds.”
Standard General and Tegna have accused the FCC of trying to kill the deal through what they see as its slow-roll review. Such hearing designation orders are indeed usually a death knell for deals.
