Merger Morass: NAB Rips FCC For Trying To Send $8.6B Tegna-Standard General Deal To “Regulatory Purgatory”
The National Association of Broadcasters is trying to stimulate forward momentum in the stalled review of private equity firm Standard General’s takeover of major TV station group Tegna.
The $8.6 billion deal requires only the approval of the Federal Communications Commission in order to close. It was proposed more than a year ago and was expected to close a few months later, but has instead faced a protracted delay. Tegna stock stopped trading in February as a resolution of the merger review appeared to be close at hand. The FCC then said it planned to refer the merger review to an administrative law judge, a move that is tantamount to killing the deal. (The risk of higher consumer prices and staff layoffs have been cited by commission as primary concerns.)
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The NAB filed a friend-of-the-court brief (read it HERE) in the U.S. Court of Appeals for the District of Columbia Circuit, siding with Tegna and Standard General and objecting to the FCC’s plan to send the deal review to what it called “regulatory purgatory.”
The FCC, which customarily has five members appointed by the U.S. president and tilts toward the political party of the White House, has been deadlocked at 2-2 for a range of reasons. Without a majority, the agency has generally shied away from weighty matters. Gigi Sohn, a Washington regulatory veteran, recently withdrew from consideration for a spot on the FCC after a fraught nomination process.
“This decision was made by career FCC staff nearly a year after the applications were filed and on bases entirely outside the commission’s jurisdiction,” the NAB said in a press release. “The decision unlawfully threatens future investment in local broadcast stations and harms the public.”
NAB President and CEO Curtis LeGeyt said the FCC’s handling of the transaction “has exposed serious flaws in the current system that impact anyone who depends on free, local broadcast service. We urge the court to correct this egregious misstep by the FCC.” He went on to add, “The vital local journalism provided by broadcasters is at risk if the FCC’s actions are left unchallenged, and we ask the court to act quickly on this matter.”
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