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Standard General to acquire Tegna for $8.6 Billion


dman748

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Well?........ 

 

Two days after it extended the cut off date, the FCC gave Soohyung Kim a real surprise tonight.

 

Hearing Designation Orders usually be the "death kneel" of any transaction. It's even more of a rarity if the parties to actually go to the hearing itself. Because that process could take up to a year to actually see the judge.

 

The craziest part about this is that a couple of days ago, Standard General was so confident that this deal would get to the finish line. The FCC waited until after trading day ended (4pm) to make this HDO announcement. Talk about Friday Night News Dump.

 

How does Mr. Desperado feel now?.....

 

 

Edited by CircleSeven
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5 hours ago, CircleSeven said:

Hearing Designation Orders usually be the "death kneel" of any transaction. It's even more of a rarity if the parties to actually go to the hearing itself. Because that process could take up to a year to actually see the judge.

 

Tegna's fate could be up in the air for another year? Ouch...

 

 

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10 hours ago, Myron Falwell said:

The FCC is asking for an ALJ to weigh in on the deal. Lance Venta has the details.

 

It’s utterly dead now despite all of Soo’s huffing and puffing.

 

Thank F*CKING god. I'm sorry, but this deal was absolute sh*t for the viewer and for the journalists. Hopefully TEGNA can resume operations and hiring.

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1 hour ago, mre29 said:

Tegna's fate could be up in the air for another year? Ouch...

That's only if the current leaders of Tegna don't walk away from the deal once it reaches the Outside Date.

 

I wouldn't give Soo any breakup fee before then. This was his mess. He wanted Tegna so bad.

 

Edited by CircleSeven
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8 hours ago, CircleSeven said:

That's only if the current leaders of Tegna don't walk away from the deal once it reaches the Outside Date.

 

I wouldn't give Soo any breakup fee before then. This was his mess. He wanted Tegna so bad.

 

@Samanthaand I were considering the likelihood that Tegna terminates the deal and sues Standard General (and possibly Apollo?) for breach of contract. Which is what Tribune did to Sinclair after terminating that deal.

 

If they go that route, it might not be for a few weeks.

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With the amount of time that has passed on this deal, Soo Kim should have found a new backer other than Apollo.  That alone would have made this deal closed by now.

 

But at this rate, he'll probably bring it to a hearing, plead his case all over again, and lose.  Tegna would probably spiral into bankruptcy and get auctioned off piecemeal to the highest bidders.

 

At some point, maybe we'd get a new company or two out of it.  Someone else to possibly bail out Sinclair, Gray and Nexstar down the road when they have to pay their debt down...

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5 minutes ago, tyrannical bastard said:

With the amount of time that has passed on this deal, Soo Kim should have found a new backer other than Apollo.  That alone would have made this deal closed by now.

 

But at this rate, he'll probably bring it to a hearing, plead his case all over again, and lose.  Tegna would probably spiral into bankruptcy and get auctioned off piecemeal to the highest bidders.

 

At some point, maybe we'd get a new company or two out of it.  Someone else to possibly bail out Sinclair, Gray and Nexstar down the road when they have to pay their debt down...

Tegna stock fell by 25% in after hours trading after the FCC dropped this on them. Even if the board wanted to continue, the investors are bailing.

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14 hours ago, CircleSeven said:

Well?........ 

 

Two days after it extended the cut off date, the FCC gave Soohyung Kim a real surprise tonight.

 

Hearing Designation Orders usually be the "death kneel" of any transaction. It's even more of a rarity if the parties to actually go to the hearing itself. Because that process could take up to a year to actually see the judge.

 

The craziest part about this is that a couple of days ago, Standard General was so confident that this deal would get to the finish line. The FCC waited until after trading day ended (4pm) to make this HDO announcement. Talk about Friday Night News Dump.

 

How does Mr. Desperado feel now?.....

 

 

I for one can’t wait to read how this all came down in Soo’s forthcoming memoir…

image.thumb.jpeg.47b2986bf882cc9acd92da98beb228c7.jpeg

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1 hour ago, tyrannical bastard said:

With the amount of time that has passed on this deal, Soo Kim should have found a new backer other than Apollo.  That alone would have made this deal closed by now.

 

Heck, he could have teamed up with another broadcaster -- Hearst, Graham, Allen, one of the networks, etc. "Look, help me out here and I'll let you pick which stations you get to keep." (This may very well have been how he got Apollo on board.)

 

 

1 hour ago, tyrannical bastard said:

Tegna would probably spiral into bankruptcy and get auctioned off piecemeal to the highest bidders.

 

Hopefully Tegna would have the sense to start selling stations well before then.

 

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11 hours ago, mre29 said:

 

Tegna's fate could be up in the air for another year? Ouch...

 

 

Another year to go to trial. I'm telling you what's going on. Tegna is what used to be Gannett. Tegna employees have a lot of friends in Washington and they are whispering in a lot of ears right now. The government will take care of its friends and I think it's a good thing in this particular case. As bad as you guys say Tegna is, I can think of far worse.

2 hours ago, tyrannical bastard said:

Tegna would probably spiral into bankruptcy

 

I see no evidence that Tegna is an operation that is financially not sound. They seem to be profitable, just not to the level that the banksters demand. There is a risk of being in limbo, however. Management has its hands tied and is not undertaking new initiatives. Probably also hard to attract new management knowing that the new owner might be booting them out the door.

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22 hours ago, Myron Falwell said:

The FCC is asking for an ALJ to weigh in on the deal. Lance Venta has the details.

 

It’s utterly dead now despite all of Soo’s huffing and puffing.

 

I'm surprised they are not asking the judge to scrutinize the intertwined ownership structure, not to mention that much of it is foreign-based. I'd throw that into the case as well.

 

But they are correct about them gaming the system and trading stations so that they can gouge cable customers even more. It's also potentially bad for the cable companies because the higher these retran fees go, the more people cut the cord. More specifically, it's bad for content providers. My cable company was actually encouraging us to drop TV and just buy internet for them, but they got taken over and there is a new regime with different ideas now. 

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42 minutes ago, GoldenShine9 said:

It seems the points that killed the deal were the foreign influence and ignoring the needs to sell conflicting stations.

If this story is any indication, it would have failed in a 2-2 deadlock with both R commissioners voting for it, so Rosenworcel spared all parties the humiliation in advance.

 

Quote

The FCC's Republican commissioners, Brendan Carr and Nathan Simington, were not supportive of the Media Bureau decision.

 

“Hundreds of local newspapers have shut down over the last few years alone. This trend is part of a broader decline in the investments necessary to sustain the journalists and reporters that are vital to communities across the country,” they said in a joint statement. “Many of the nation’s local TV stations are trying to step up and expand their newsgathering operations. At this moment, 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. After a protracted, nearly yearlong review, the commission should be providing the parties with a decision on the merits — not an uncertain future.”

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1 hour ago, Myron Falwell said:

If this story is any indication, it would have failed in a 2-2 deadlock with both R commissioners voting for it, so Rosenworcel spared all parties the humiliation in advance.

 

To be fair, if Gigi Sohn’s nomination to the FCC Commissioners’ Board hadn’t been held up in the Senate for the better part of two years, the deal probably would have been denied anyway based on the conflicts and the related intertwining of Apollo’s existing interests in Cox Media Group and its proposed interests in Tegna.

Edited by T.L. Hughes
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8 minutes ago, T.L. Hughes said:

To be fair, if Gigi Sohn’s nomination to the FCC Commissioners’ Board hadn’t been held up in the Senate for the better part of two years, the deal probably would have been denied anyway based on the conflicts and the related intertwining of Apollo’s existing interests in Cox Media Group and its proposed interests in Tegna.

Here's the thing. This deal would have failed anyway with or without Gigi: a 2-2 deadlock still sinks the deal.

 

Standard General and Apollo had one full year to get this right. Either party could have offered to divest market conflicts in Atlanta, Seattle and Jacksonville. Apollo could have asked the deal be amended so they don't get WFAA, KHOU, etc. Standard could have offered Graham an olive branch and their pick of a station or offered them a stake in the company. Soo could have shown the bare minimum of humility and self-awareness instead of saying the same boilerplate talking points over and over again.

 

This is a textbook case of how NOT to conduct an M&A. Soo came off as a belligerent novice in the field of business that for some inexplicable reason previously managed to merge Young, LIN and MediaGeneral out of existence.

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24 minutes ago, Myron Falwell said:

Here's the thing. This deal would have failed anyway with or without Gigi: a 2-2 deadlock still sinks the deal.

My point, exactly. Either way, the numbers weren’t there to get the FCC to agree to the deal. The Republican members were going to overlook the glaring issues with the deal, and the Democratic commissioners wouldn’t have in both scenarios. Standard General should’ve known that aligning with Apollo, but not rectifying the conflicts between Tegna and Cox in a palatable manner was going to end in the deal’s failure.

 

Sinclair’s deal to buy Tribune ended in an ALJ referral and Tribune subsequently cutting bait because of a similar “wanting to have your cake and eat it too” mentality when it came to market conflicts. At least Apollo didn’t attempt to transfer the Cox stations into shell companies and enter them into SSA/JSAs with the Tegna stations, like Sinclair tried to do with many of the Tribune stations… although the intertwining interests would have made Cox a pseudo shell for the conflicts.

Edited by T.L. Hughes
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1 hour ago, Myron Falwell said:

Here's the thing. This deal would have failed anyway with or without Gigi: a 2-2 deadlock still sinks the deal.

 

Standard General and Apollo had one full year to get this right. Either party could have offered to divest market conflicts in Atlanta, Seattle and Jacksonville. Apollo could have asked the deal be amended so they don't get WFAA, KHOU, etc. Standard could have offered Graham an olive branch and their pick of a station or offered them a stake in the company. Soo could have shown the bare minimum of humility and self-awareness instead of saying the same boilerplate talking points over and over again.

 

This is a textbook case of how NOT to conduct an M&A. Soo came off as a belligerent novice in the field of business that for some inexplicable reason previously managed to merge Young, LIN and MediaGeneral out of existence.

 

At the very least he could've just been honest and DT2'ed an affiliation onto one station like Sinclair has done. It's brutal and turns a station into the equivalent of a bot under whichever widget salesman now 'owns' the station slumming it with Dabl, but it would have passed the FCC. I hate to say it (as they deal with Diamond because they had to do that deal or the great RSN reckoning would've happened in 2020, not now), but Sinclair learned their lesson the hard way with the Trib merger and now their DT2 strategy is FCC-smart. Stantegnox was never going to be a reality in this environment, under this setup, and with as much horse-trading as the hard computer in a Monopoly video game just being brutal.

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2 hours ago, Myron Falwell said:

Standard General and Apollo had one full year to get this right. Either party could have offered to divest market conflicts in Atlanta, Seattle and Jacksonville. Apollo could have asked the deal be amended so they don't get WFAA, KHOU, etc. Standard could have offered Graham an olive branch and their pick of a station or offered them a stake in the company. Soo could have shown the bare minimum of humility and self-awareness instead of saying the same boilerplate talking points over and over again.

I’m probably going to be preaching to the choir here, but this is precisely what I don’t get about Apollo and SG’s handling of this. If they had just spun off the conflicts in Cox markets, and possibly a few other stations, I’m pretty sure they’d own Tegna right now. How could they be so greedy and arrogant as to shoot themselves in the foot?
 

I’d go as far as to say that this was more incompetent than the failed Sinclair/Tribune merger. Sinclair/Tribune established the precedent that even an M&A-friendly FCC wouldn’t tolerate companies trying to blatantly circumvent ownership rules. Apollo/SG knew that precedent (and knew they were dealing with a stronger FCC), and decided to circumvent those rules anyway. That’s just stupidity IMO.

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What @nycnewsjunkie said. All SG had to do was agree to put the Tegna stations in Atlanta, Charlotte, Jacksonville, and Seattle up for sale (no need to make Coxpollo sell its stations when this whole thing was Soo Kim's brainchild) and the deal would've happened. Instead, Kim/SG and ApollCox are joining Sinclair in sitting in the corner wearing egg on their faces. Eggs are for eating, not wearing.

 

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5 hours ago, mre29 said:

What @nycnewsjunkie said. All SG had to do was agree to put the Tegna stations in Atlanta, Charlotte, Jacksonville, and Seattle up for sale (no need to make Coxpollo sell its stations when this whole thing was Soo Kim's brainchild) and the deal would've happened. Instead, Kim/SG and ApollCox are joining Sinclair in sitting in the corner wearing egg on their faces. Eggs are for eating, not wearing.

 

Hell, better yet, just do away with the King Broadcasting cluster period!!!

 

Hearst would have jumped out of the sky for those stations. If not them, then Graham might have.

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Incredibly, Soo is yelling at the FCC to vote on the deal anyway instead of sending this to an ALJ. Because that’s exactly what you should do, said no one ever.

Quote

"A decision delayed is a decision denied," Standard General’s Managing Partner Soo Kim said in the statement. "Our proposed transaction is consistent with all FCC regulations and precedent. It is bolstered by a voluntary commitment to invest in local news, preserve newsroom jobs, and address purported concerns related to consumer pricing. But rather than rule on the transaction’s merits, as the law requires, the Media Bureau is attempting to scuttle the deal by ordering a wholly unnecessary hearing process, that if left standing by the Commission, would kill the deal.”

Bullying the FCC chairperson to vote for your deal when she tacitly rejected it in the ALJ order might be THE ultimate galaxy brain move.

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1 hour ago, Myron Falwell said:

Incredibly, Soo is yelling at the FCC to vote on the deal anyway instead of sending this to an ALJ. Because that’s exactly what you should do, said no one ever.

Bullying the FCC chairperson to vote for your deal when she tacitly rejected it in the ALJ order might be THE ultimate galaxy brain move.

 

I'm really surprised that the the order sending it up to the alj judge didn't specifically call out the ownership structure. There is precedent for attributing interests in many areas of the law, especially tax and securities law.  If you own 10% of a company, your wife owns 10%, and each of the three kids own 10%, in many contexts the law says you own 50%.

 

I don't care whether Apollo has any say in direct day-to-day management or not, they still have a say by virtue of where they are parking their money and the profit they will be making from the Tegna stations in markets where they double up. They should not allow this deal simply based on that.

Edited by DirtyHarry
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6 minutes ago, DirtyHarry said:

 

I'm really surprised that the the order sending it up to the alj judge didn't specifically call out the ownership structure. There is precedent for attributing interests in many areas of the law, especially tax and securities law.  If you own 10% of a company, your wife owns 10%, and each of the three kids own 10%, in many contexts the losses you own 50%.

 

I don't care whether Apollo has any saying direct day-to-day management or not, they still have a say by virtue of where they are parking their money and the profit they will be making from the Tegna stations in markets where they double up. They should not allow this deal simply based on that.

Rosenworcel didn’t explicitly say it in the order, but the retransmission fees mention does come off as addressing objections from the telecoms, in which they interpreted Apollo and SG as jointly benefitting from higher cable bills. All an ALJ needs to do is see the evidence and come to the conclusion this was an attempt to collude and game the system.

 

I’m taken aback by Soo bullying the FCC to vote on the deal. He’s given the D commissioners every reason in the book now to vote “no”, so it’ll fail in at least a 2–2 tie. Is he hoping for it to fail so he can litigate and cry that the system is prejudiced against him? Or is he consumed by delusions of grandeur? Or both??

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