BOSTON (State House News Service) – To promote competition and address media industry consolidation, federal regulators should step in and block a hedge fund from from acquiring broadcaster Tegna, according to Sen. Elizabeth Warren.
In a new letter to the Federal Communications Commission, Warren said the proposed $5.4 billion acquisition by Standard General presents “straightforward competition concerns” since Tegna and Standard General both own stations in overlapping media markets and because the deal “will reduce the number of competitors that can place spots on television for advertisers, produce programming for television audiences, and employ workers in those markets.”
“You have an enormous opportunity to protect workers and consumers nationwide by using this authority aggressively in this matter,” Warren wrote in her letter, noting that Standard General and private-equity firm Apollo Global Management hold a significant stake in Cox Media Group, which owns television stations in nine U.S. markets.
Tegna owns TV stations in four overlapping markets – Atlanta, Charlotte, North Carolina, Jacksonville, Florida and Seattle, according to Warren. Warren argues the deal “could lead to higher prices for customers across the nation because the acquisition would allow Standard General to renegotiate certain retransmission fees and pass costs on to advertisers or cable TV customers.
“Reports indicate that Apollo plans to sell a Boston, Massachusetts television station to Standard General, which would allow Standard General to have new Tegna stations charge pay-TV companies as much for relaying their signals to subscribers as the Boston station charges,” Warren wrote to FCC Chair Jessica Rosenworcel on Wednesday, adding that the unspecified Boston station’s retransmission fee is higher than the fees currently charged Tegna stations.
Warren asserts that preemptive fixes outlined to address “anticompetitive” aspects of the deal “will fail” and noted that Federal Trace Commission Chair Lina Khan, who was CC’d on the letter, “recently expressed her belief that ‘agencies should more frequently consider opposing problematic deals outright’ rather than imposing remedies of any sort.”
“The FCC has significant and underutilized authorities to protect competition in the media industry by preventing deals that harm the public interest or reduce competition,” Warren wrote. “I urge you to fulfill your statutory duty by blocking this acquisition.”