On Tuesday, March 28, Standard General sued the FCC in the U.S. Court of Appeals for the District of Columbia Circuit. In short, it wanted the judicial body’s intervention in keeping its TEGNA privatization effort from disintegrating — or, months from now, getting a denial or approval decision from the Presiding Judge asked to review the acquisition under the leadership of a Commission Administrative Law Judge.
A 57-page Mandamus Request was submitted with the court. On Friday, it was denied.
This puts the proposed TEGNA transaction, which also sees Cox Media Group majority owner Apollo Global Management take on a significant non-voting majority stake in a “new TEGNA,” in serious peril.
With Circuit Judges Cornelia Pillard, J. Michelle Childs and Florence Pan making the decision for the D.C. federal appeals court in “SGCI Holdings III LLC, et al. v. FCC,” a simple one-page Order could be interpreted by some as a death sentence for a deal more than a year in the making — with financing running out in less than six weeks.
The judges considered the petitioners’ writ of mandamus, along with a friend-of-the-court brief from the NAB in support of a request that would have directed the FCC’s Commissioners to vote on the TEGNA acquisition, abandoning a Administrative Law Judge-led hearing to answer questions about the deal the Media Bureau still seeks answers of. While Nate Simington and Brendan Carr, the FCC’s Republican Commissioners, have voiced their disapproval of the Hearing Designation Order issued by Media Bureau Chief Holly Saurer, Chairwoman Jessica Rosenworcel and Democratic Commissioner Geoffrey Starks have remained silent.
Their silence, however, doesn’t mean they have no opinion on the matter. Indeed, they fought against the Pai Commission’s “modernization” efforts that led to further deregulation of broadcast media. And, high-profile Democrats including Nancy Pelosi (D-Calif.) have spoken out against the TEGNA deal.
Meanwhile, pro-MVPD lobbying group the American Television Alliance filed a motion for leave to file an amicus curiae brief. That was granted, as the judges denied the Standard General/TEGNA/Cox Media Group petition for writ of mandamus — ending the effort to get the FCC to discontinue the ALJ hearing and vote on the deal.
The judges’ two-sentence explanation for their decision:
Petitioners have not demonstrated that respondent has unreasonably delayed in acting
on their applications. Nor have they shown that respondent has a “crystal clear” duty to rule on their applications without resort to a hearing.
The failure to demonstrate an unreasonable delay saw the judges turn to the 1984 Telecomms. Research & Action Ctr. v FCC case, while the duty to rule without a hearing wasn’t so “crystal clear” when using Ctr. for Biological Diversity as a basis for the decision.
The ruling follows an April 3 two-page order which determined that an appeal “filed after a bureau decision but before resolution by the full Commission is subject to dismissal as incurably premature.” This scuttled a request from Standard General L.P. to consider the Hearing Designation of its proposed acquisition of TEGNA as a final determination the court may use to make its ruling.
Now, with May 22 the expiry date on the TEGNA’s deal financing, all eyes are on Soohyung Kim and Standard General on what to do. Can it restructure the deal significantly enough in the next month to get the ALJ to withdraw its Order, and get the FCC to approve it post-haste? Is the deal all but dead, opening the door to other buyers — in particular Byron Allen?
Standard General representatives reached for comment by RBR+TVBR on April 21 are now focusing their efforts on convincing Rosenworcel to vote on the merger and end the ALJ hearing.
“Throughout this process, we’ve been consistent in our ask to be treated equally: that this transaction and the parties to it should be treated fairly, applying the same precedent and procedural norms given to past deals,” the company said. “If the Commission has concerns with the deal, it can transparently share them with Standard General, instead of effectively rejecting our application without ever even having to give any reason by extending the ALJ process into 2024 — far past the May 22, 2023date when funding for the deal expires. At any point, however, between now and May 22nd, the FCC has the ability to override the Media Bureau’s deeply flawed Hearing Designation Order and bring this deal to a vote. We urge the FCC to treat this matter fairly and hold that vote — all applicants deserve a timely answer.”
