FCC ALJ Terminates Standard/Tegna Hearing

FCC Administrative Law Judge Jane Halprin terminated the Standard/Tegna hearing proceeding, said an order Thursday in docket 22-162. Tegna and Cox Media Group withdrew from the proceeding last week, and Tegna filed the formal withdrawal of its transfer applications Wednesday. Standard said it's ready to continue litigating the matter. “It is not in the public interest to expend the time and resources to continue this hearing as an academic exercise,” wrote Halprin. The proceeding "is therefore terminated,” said the order.

The Standard/Tegna HDO required Halprin to determine whether the deal would lead to an increase in retransmission consent fees or a decrease in local content, but with the agreement's collapse last week, those are no longer relevant matters, Halprin said. “Because the merger arrangement has been dissolved and the underlying FCC applications are being withdrawn to the extent technically possible, the issues designated for hearing are moot.” Attorneys told us it might be technically possible for Standard to appeal the ALJ’s order, but there's little reason to do so and such an appeal would be unlikely to go far when there's no longer a transaction. Such an appeal might be relevant if the HDO had involved character issues that could affect future Standard General license renewals, but that isn’t the case, they said.

With the withdrawal of Tegna and CMG parent company Apollo Global Management and “the dismissal of the application, the judge properly found there was absolutely no case to consider or reason to further expend government resources,” said Andrew Schwartzman, who represented Communications Workers of America unions NewsGuild and the National Association of Broadcast Engineers and Technicians opposing the transaction. "Deal over," he said.

Though the deal is done, broadcast attorneys and others said they don’t expect the matter to go away. NAB CEO Curtis LeGeyt urged Congress to act on the FCC’s merger review authority over the agency’s handling of Standard/Tegna, and lawmakers asked the FCC’s Office of Inspector General to investigate. “It is unfortunate that the full Commission never had a chance to vote on Standard General’s proposed acquisition of TEGNA,” said an NAB spokesperson. “Instead, the unprecedented and opaque process conducted by FCC staff resulted in the rejection of the first chance in decades to encourage a meaningful increase in station ownership diversity.”

The FCC “continues failing in recognizing concrete opportunities to increase diversity -- whether through transactions or the apparently dormant incubator program -- and further demonstrates the need to correct fundamental flaws in the current merger review system,” NAB said (see 2209130045). Broadcaster concerns that the deal’s fate is an indication broadcast acquisitions aren’t welcome at the FCC aren’t warranted, Schwartzman said. The Standard/Tegna transaction involved private equity funding, broadcasters buying stations from other broadcasters they were investors in, and stations being transferred between entities purely to trigger after-acquired clauses, he said. “In all likelihood, a straight sale would have gone through,” Schwartzman said.