Foot-dragging by a federal agency over a deal that would create the largest minority-owned and female-led broadcast station group in U.S. history is raising questions about the Biden administration’s motives.
Is the Federal Communications Commission holding the deal hostage to increase its power? Or is there something even more unseemly behind the resistance to creating a company run by a naturalized American citizen born in South Korea that has held up the application for more than 300 days, far in excess of similar deals?
Standard General’s application to acquire TEGNA is, on its face, a more simple and direct deal than others it’s recently reviewed. It complies with FCC ownership rules without any waivers or divestiture. Still, it has languished without a decision after three pleading cycles, two extensions, and multiple requests for additional documents and information.
“A year is a long time,” said Roslyn Layton, an international technology policy analyst.
Other similar acquisitions were blips on the radar compared to the handling of the Standard General-TEGNA application.
Scripps-ION, which had to divest 23 full-power TV stations in 21 markets and get reauthorization of satellite authority for three stations, required just 62 days. Gray-Quincy involved the divestiture of 10 full-power TV stations in seven markets, three failing station waivers, and the reauthorization of satellite authority for two stations. That took 168 days. Gray-Meredith needed divestiture of one full-power TV station and was resolved in 185 days.
All three of those deals underwent a comment period for public comments and petitioner reply. And the FCC got the approvals done.
Not so with TEGNA.
Starting in May 2022, Standard General-TEGNA has undergone: Public comment and petitioner reply comment periods; two extensions of pleading cycles; two cycles of FCC document and information request; a rules waiver to allow the petitioners to raise new matters on reply; and two pleading cycles — one of which is currently open. Additionally, observers say there have been unsupported allegations regarding the applicants’ sworn declarations, which is contrary to FCC pleading standards.
“The FCC has had it pending for 300-plus days? That’s crazy. This should have taken three months,” said one industry insider with a long history of working on similar acquisitions.
And while disputes over these deals are common, the vitriol toward the TEGNA deal, and its racial overtones, is not.
In October, Standard General released a statement responding to “the repeated ad hominem attacks made by opponents of its proposed acquisition of TEGNA Inc. at the U.S. Federal Communications Commission, raising concerns with certain opposing parties’ conduct in the proceeding.” It was an extraordinary strike at the president and members of The NewsGuild-CWA, a labor union representing journalists.
“We are extremely concerned by the manner in which Jon Schleuss, David Goodfriend, and Andrew Schwartzman of the NewsGuild continue to ignore the facts of this deal, and more troubling are their sexist and racially charged ad hominem attacks,” the release stated.
Among the claims, per the release:
—“Soo Kim’s investment is ‘anonymous foreign investment in American newsrooms.’”
— “This deal should be especially scrutinized because of ‘China(’s) increased tensions in the Taiwan Strait.’”
— “Soo Kim’s transaction ‘does not promote ownership diversity as it is understood by the public interest and civil rights community, and by commission policy.’”
— “Mr. Kim ‘is not barred by his race from becoming a successful entrepreneur’ while ‘Ms. McDermott is not barred by her gender to be selected to run a large corporation.’”
“It’s their way of saying Kim is the ‘wrong kind’ of diversity,” the insider said.
The following month, Kim published an op-ed at RealClearPolicy stating that he is “used to the rough and tumble of a competitive marketplace … but some of the opposition comments filed at the FCC are beyond the pale.”
He noted the NewsGuild-CWA generating so much of the aggressive reaction represents just four of more than 6,000 employees at TEGNA.
Among the commitments Standard General has made is a pledge not to cut newsroom staff at any of TEGNA’s local stations for at least two years. In the op-ed, Kim said the company has increased newsroom staffing by 28 percent across the stations it already owns.
“The FCC wants diversity in ownership,” Layton said. “This deal would (create) the largest minority ownership of any broadcast network in the country.”
She also said Standard General is trying to move the needle on the “nascent idea” to make local news digital, which would allow consumers to view programming on computers, devices, or smart TVs. The stations could also branch into digital ads and “all the cool things you can do” with Netflix and other streaming services. TEGNA owns the digital brands, but it needs money from investors to bring that model to programming.
Still, the deal does not have the political approval of Washington.
“You have to make it politically palatable and make sure the FCC stakeholders are placated,” Layton said. “You can pay some political rent in the process.”
