A high-profile U.S. Senator on Thursday, in a letter sent directly to the Chairwoman of the FCC, expressed her “serious concerns” over TEGNA’s pending acquisition by Standard General.
Now, Soohyung Kim, who heads Standard General, has directly responded to Elizabeth Warren.
The letter, distributed late Friday, sees Soo seeking the opportunity to meet with Warren at her earliest convenience to address all of the concerns she has shared with Jessica Rosenworcel and the FCC.
Until then, Soo “respectfully” offers several points for her consideration — all of which are those offered previously by Standard General.
“The fundamental rationale for this transaction is our conviction that as a private company dedicated to local broadcast journalism, Standard General intends and is able to ensure that TEGNA becomes a stronger competitor,” he writes. “Today’s local broadcasters compete with the world’s largest tech and media giants. But our considerable experience owning television broadcast stations tells us that viewers deeply value local news, vital
weather service, sports and entertainment programming, while local advertisers crave a trusted local advertising alternative to those national tech and media giants.”
Against that backdrop, Soo continues, “The binding commitments we have made, and some have questioned, are not deviations from our strategy – they are formal affirmations of it.
We committed to not reduce jobs at TEGNA’s newsrooms because we believe investing in news and journalism is the path to making TEGNA a more successful competitor. Our track record is clear – we added more than 40,000 hours of local news in just seven years at the stations we have operated.”
Soo then asks Warren to review a letter of support from D. Taylor, president of Unite Here. Soo notes, “Based on his experience of Standard General as a company that understands and is responsive to the needs of labor. In addition, we have irrevocably waived any contractual right to alter TEGNA’s current retransmission consent (RTC) fees and have given MVPDs the ability to choose the legacy contract they prefer, which has the
potential to improve their rates relative to the status quo. As a result, this transaction will not impact the RTC market at all. In fact, one MVPD – Comcast – has already availed itself of the favorable terms we have offered.”
With respect to consolidation, TEGNA, in Soo’s view, “will be a smaller station group after the transaction than it is today, and would comply with the national ownership cap even if the UHF Discount were eliminated – a goal long held by FCC Chair Rosenworcel.”
While that point is debatable based on Kagan’s ad revenue model, making TEGNA one of the biggest companies in the U.S. by dollar intake, Soo concludes his letter by noting — contrary to a common misperception — that Standard General does not own any stake in Cox Media Group.
That is correct. It is minority non-voting equity holder Apollo Global Management — a key partner in Standard General’s TEGNA deal — that is the majority owner of CMG.
Regardless, Soo assured Warren that “as a ‘belt-and-suspenders’ effort to address any conceivable concerns regarding Apollo’s role as one of the smaller sources of financing for the TEGNA acquisition,” Standard General has “fully committed to not enter any Joint Sales, Shared Services or Local Marketing agreements with CMG stations.”
This, Soo said, is being done “despite the fact that TEGNA today could enter into just such contracts consistent with FCC rules and policies.”
What would happen if Warren’s efforts to block the deal succeeded? Soo has his opinion.
“As an immediate effect, TEGNA, as a publicly traded company, would be left subject to the intense pressure of the public markets to cut costs as the economy slows, ad spending shrinks and competition increases,” he argued. “The current economic climate has made announcements of media job cuts routine across the industry, including most recently at CNN, Gannett and the Washington Post. In contrast, we have committed to maintain, and as noted above, hope to grow newsroom jobs over next two years.”
Rejection of the transaction, which Soo said “complies with all FCC rules without need of station divestitures or waivers,” would have “a chilling effect on future investment in this sector, particularly for minority owners and sources of financing.”
Soo also reiterated his statements that the TEGNA deal would create America’s largest minority-owned and woman-led broadcaster. “If that fact means nothing to regulators in their public interest assessment — indeed, if the goal posts are moved to make approval far harder than any previously proposed transaction in this industry — it only diminishes the chances of other minority entrepreneurs entering this critically important space. We know that nobody wishes local job cuts, less investment in local broadcasting and reduced
opportunities for diversifying media ownership. Quite the opposite. That is why we earnestly hope you will engage with us on the concerns you raise.”
He ended the two-page letter on a personal note, sharing that like many Americans Soo has been “categorized and lumped in with other groups all my life. I look forward to the opportunity to meet and explain who I am, what we do, and why I believe we can be a partner in advancing the goals that we share.”
