Standard General Sets the Record Straight Regarding Its Pending Acquisition of TEGNA

Rhea-AI Summary

Standard General L.P. announced its pending acquisition of TEGNA (NYSE: TGNA), aiming to create the largest minority-owned and female-led broadcast station group in U.S. history. The acquisition is said to provide significant public interest benefits, enhancing local news and community service. Standard General refuted claims made by Congress members regarding media consolidation and job cuts, asserting its commitment to localism and diversity. The transaction complies with FCC rules and awaits approval, emphasizing a goal of increasing minority-owned TV stations in the U.S.

Positive

• Creation of the largest minority-owned and female-led broadcast station group in U.S. history.
• Commitment to localism, with plans to enhance local news content.
• Increased staffing at stations by 28% since February 2021.

Negative

• Transaction has been under FCC review for almost nine months, causing uncertainty.
• Potential risks related to regulatory approvals that could delay or prevent closing.
• Possibility of disruptions to operational relationships during the acquisition process.

 Notes Misleading Assertions in Congressional Letter

Transaction Will Create the Largest Minority-Owned and Female-Led Broadcast Station Group in U.S. History and Yield Significant Public Interest Benefits

Standard General Highlights Commitment to Localism of TEGNA Stations

NEW YORK--(BUSINESS WIRE)-- Standard General L.P. (“Standard General”) today issued the following statement regarding its pending acquisition of TEGNA Inc. (NYSE: TGNA):

Standard General’s proposed acquisition of TEGNA will yield significant public interest benefits without any countervailing public interest harms, including creating the largest minority-owned and female-led broadcast station group in U.S. history. We were therefore disappointed to see the FCC petitioners enlist the involvement of Speaker Pelosi and Congressman Pallone by misleading them with the same false statements they have been making to the FCC.

• While the Pelosi-Pallone letter decries the UHF Discount, the TEGNA transaction does not rely on the UHF Discount in any way.
• While the Pelosi-Pallone letter complains of media consolidation, TEGNA will actually be smaller after the proposed transaction, creating the opposite of consolidation.
• While the Pelosi-Pallone letter repeats the petitioners’ claim that Standard General will supplant local news content with news produced in DC, there is utterly no support in the FCC record for that claim and Standard General has made clear in the record that it will not.
• The Pelosi-Pallone letter speculates that Standard General will cut station jobs at TEGNA, when in fact Standard General made a commitment in the FCC record that it was not planning any such actions — a commitment no prior FCC broadcast station applicant has ever made.
• The Pelosi-Pallone letter falsely claims that Standard General stated several years ago that TEGNA has “too many employees,” when in fact, Standard General publicly protested TEGNA’s furlough of employees during the pandemic.
• The Pelosi-Pallone letter speculates about the influence of foreign ownership, when 100% of the voting shares and the right to appoint the entire TEGNA board is held by a U.S citizen.
• The Pelosi-Pallone letter speculates about “price increases on American families” when TEGNA, as a broadcaster, makes its content available to the public for free over-the-air. Only cable companies decide what price their own subscribers pay.

We are therefore very disappointed to see the petitioners’ package of misstatements at the FCC being used to also mislead our elected representatives into applying improper pressure upon the FCC.

Soo Kim and Deb McDermott have a proven track record of enhancing stations’ service to their local communities, increasing local news output, and investing in the resources that stations need to compete successfully. Standard General has increased newsroom staffing at its current stations by 28% since acquiring them in February 2021, while, in comparison, the employee headcount at other major broadcasters, including TEGNA, dropped during the pandemic. Soo Kim and Deb McDermott are committed to bringing that same dedication to competition and localism to the TEGNA stations, creating the largest minority-owned and female-led television station group in U.S. history and dramatically increasing minority broadcast ownership and viewpoint diversity.

The proposed TEGNA transaction complies with all FCC rules without the need for any waivers, divestitures, or special treatment. Standard General seeks nothing from the FCC other than to be treated in the same fashion as other applicants whose transactions were promptly approved in the past two years, including Gray’s acquisition of Meredith, which unlike the TEGNA transaction, involved a station divestiture to comply with FCC local ownership rules, and Scripps’ acquisition of Ion, which involved the divestiture of 23 stations to meet FCC ownership limits. The Gray-Meredith transaction was approved in less than six months, and the Scripps-Ion transaction was approved in less than three months. The TEGNA transaction has been under review at the FCC for almost nine months at this point, and the time has come to approve the transaction and unleash an almost 300% increase in the number of minority-owned TV stations in the U.S., bringing badly-needed diversity to the nation’s broadcast station ownership.

We continue to work collaboratively with FCC staff in their review of the proposed transaction.

About Standard General

Standard General was founded in 2007 and manages capital for public and private pension funds, endowments, foundations, and high-net-worth individuals. Standard General is a minority-controlled and operated organization. Mr. Kim is supported by a diverse, highly experienced 17-person team, including seven investment professionals with over 120 years of collective investing experience.

Cautionary Statement Regarding Forward-Looking Statements

This communication includes forward-looking statements within the meaning of the “safe harbor” provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are based on a number of assumptions about future events and are subject to various risks, uncertainties and other factors that may cause actual results to differ materially from the views, beliefs, projections and estimates expressed in such statements. These risks, uncertainties and other factors include, but are not limited to, the following: (1) the timing, receipt and terms and conditions of the required governmental or regulatory approvals of the proposed transaction and the related transactions involving the parties that could reduce the anticipated benefits of or cause the parties to abandon the proposed transaction, (2) risks related to the satisfaction of the conditions to closing the proposed transaction (including the failure to obtain necessary regulatory approvals), and the related transactions involving the parties, in the anticipated timeframe or at all, (3) the risk that any announcements relating to the proposed transaction could have adverse effects on the market price of TEGNA’s common stock, (4) disruption from the proposed transaction making it more difficult to maintain business and operational relationships, including retaining and hiring key personnel and maintaining relationships with TEGNA’s customers, vendors and others with whom it does business, (5) the occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreement entered into pursuant to the proposed transaction or of the transactions involving the parties, (6) risks related to disruption of management’s attention from TEGNA’s ongoing business operations due to the proposed transaction, (7) significant transaction costs, (8) the risk of litigation and/or regulatory actions related to the proposed transaction or unfavorable results from currently pending litigation and proceedings or litigation and proceedings that could arise in the future, (9) other business effects, including the effects of industry, market, economic, political or regulatory conditions, (10) information technology system failures, data security breaches, data privacy compliance, network disruptions, and cybersecurity, malware or ransomware attacks, and (11) changes resulting from the COVID-19 pandemic, which could exacerbate any of the risks described above.

Readers are cautioned not to place undue reliance on forward-looking statements made by or on behalf of Standard General. Each such statement speaks only as of the day it was made. Standard General undertakes no obligation to update or to revise any forward-looking statements. The factors described above cannot be controlled by Standard General. When used in this communication, the words “believes,” “estimates,” “plans,” “expects,” “should,” “could,” “outlook,” and “anticipates” and similar expressions as they relate to Standard General or its management are intended to identify forward looking statements. Forward-looking statements in this communication may include, without limitation: statements about the potential benefits of the proposed acquisition, anticipated growth rates, Standard General’s plans, objectives, expectations, and the anticipated timing of closing the proposed transaction.

View source version on businesswire.com: https://www.businesswire.com/news/home/20221006005870/en/

For media inquiries, contact:



Standard General

Andy Brimmer / Jamie Moser / Jack Kelleher

Joele Frank, Wilkinson Brimmer Katcher

212-355-4449

Source: Standard General L.P.

FAQ

What are the benefits of Standard General's acquisition of TEGNA?

The acquisition will create the largest minority-owned and female-led broadcast station group in U.S. history and enhance local news and community engagement.

How long has the TEGNA acquisition been under review?

The TEGNA acquisition has been under FCC review for almost nine months.

What commitments has Standard General made regarding local news content?

Standard General has committed to maintaining and enhancing local news output at TEGNA stations.

What challenges could affect the completion of the TEGNA acquisition?

Challenges include obtaining necessary regulatory approvals and potential disruptions to business operations during the acquisition process.

How does Standard General plan to impact minority broadcast ownership with the acquisition?

The acquisition aims to increase minority ownership in broadcast stations, significantly enhancing viewpoint diversity in U.S. media.