The Federal Communications Commission put off consideration of hedge fund Standard General LP’s proposed purchase of broadcaster Tegna Inc., a delay that could kill the $5.4 billion transaction.
Bloomberg reports the agency said in an emailed order Friday it’s concerned that the transaction proposed a year ago might trigger price increases for consumers as TV stations boost charges for cable providers. The deal might also reduce local content on TV stations, the FCC said, and ordered a hearing.
“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,” FCC Chairwoman Jessica Rosenworcel said in a news release. “We will take the time needed to address these critical questions.”
Shares of Tegna fell as much as 26% to $16.15 in extended trading after the announcement. Standard General is offering $24 a share for the company.
A hearing will take place at a date yet to be chosen and drag out the review, potentially beyond the companies’ time frame for completion. It would take place before the agency’s administrative law judge, who didn’t immediately respond to a telephone call Friday.
The NewsGuild-CWA union opposed the deal, saying the would-be purchasers might cut jobs and reduce news coverage, as private equity and hedge fund buyers of local newspapers have done.
“We have witnessed hedge funds murdering local newspapers, cutting jobs and decimating local news,” NewsGuild-CWA President Jon Schleuss said. “We engaged in this fight to prevent the same thing from happening in local broadcast.”
The agency’s Republican commissioners, Brendan Carr and Nathan Simington, criticized the move.
“The FCC should be working to encourage more of the investment necessary for these local broadcasters to innovate and thrive. It does the opposite today,” the pair said in a joint statement. “After a protracted, nearly yearlong review, the commission should be providing the parties with a decision on the merits not an uncertain future.”
Standard General earlier told the FCC it would enhance news coverage and wouldn’t cut newsroom jobs for at least two years.
Standard General’s Soo Kim agreed to buy the company, which operates 64 TV stations, in February 2022. Private equity firm Apollo Global Management Inc. joined in funding of the transaction.
No comments:
Post a Comment