The FCC has ordered its Administrative Law Judge to hold a hearing on the pending purchase of TEGNA by affiliates of Standard General LP and the associated divestitures including a swap of assets with Cox Media Group should proceed.
In the order, the FCC is focusing on the potential public interest harm from increased retransmission consent fees and the potential public interest harm to localism including due to labor reductions. The FCC writes, “Applying these principles to the transaction at issue, we designate for hearing the above- captioned applications because there exists a substantial and material question of fact as to: (1) whether retransmission consent fees will rise as a result of the Transactions, and if so, whether such an increase is the result of a properly functioning, competitive marketplace, or, alternatively, whether such rate increases would be the result of the unique structure of the Transactions in which the various assignments and/or transfers of control are closed sequentially in order to take advantage of after-acquired station clauses and maximize retransmission revenue; and (2) whether and if so, to what extent, the proposed transaction will harm localism, including through the reduction of station-level staffing. Although the parties to this proceeding at the Bureau’s direction have developed a record that is not insubstantial, for the reasons set forth below there remain substantial and material questions of fact and based upon the record before us, we are unable to find that grant of these Transactions would be consistent with the public interest and therefore must investigate these issues further at hearing.”
Standard General noted earlier this week that the deal has received approval from the DOJ and all other government entities.
The radio impact on the deal is minimal as TEGNA owns just Sports “97.1 The Fan” WBNS-FM and “ESPN 1460” WBNS Columbus OH. The deal would also see Cox add two television stations in Houston to its five FMs. A separate company controlled by Standard General, MediaCo Holdings owns Hip Hop “Hot 97” WQHT and Adult R&B 107.5 WBLS New York.
The Federal Communications Commission today announced that the Media Bureau has designated certain questions related to the pending applications involving Standard General, TEGNA, and Cox Media Group to its administrative law judge. The pending applications involve a series of transactions that would result in Standard General’s acquisition of 64 full-power TV stations and two full-power radio stations currently owned and operated by TEGNA.
The Hearing Designation Order focuses specifically on material concerns in the record related to how the proposed transaction could artificially raise prices for consumers and result in job losses.
“As part of the FCC’s mission, we are responsible for determining whether grant of the applications constituting this transaction serves the public interest. That’s why we’re asking for closer review to ensure that this transaction does not anti-competitively raise prices or put jobs in local newsrooms at risk,” said Chairwoman Rosenworcel. “The additional review will allow us to make a more informed assessment on whether proposed safeguards are sufficient to protect the public interest, and we will take the time needed to address these critical questions.”
Section 310(d) of the Communications Act of 1934 requires that the Commission make an affirmative determination that grant of an application for assignment or transfer of control serves the public interest. In doing so, the Commission must consider whether a proposed transaction could result in public interest harms by substantially frustrating or impairing the objectives or implementation of the Act or related statutes. Where the record before the Commission regarding any transfer application presents substantial and material questions of fact, the statute requires the Commission to designate those issues for an evidentiary hearing.
