NAB CEO Curtis LeGeyt, the top lobbyist for the broadcast industry, said he hopes the legal mess over the FCC’s handling of private equity firm Standard General’s acquisition of station group Tegna is not a sign of M&A meltdowns to come.
“My hope is it’s a one-off,” he said during a briefing with reporters Monday during the NAB Show in Las Vegas. “We have real concerns that this could disincentivize investment in local broadcast stations.”
The $8.6 billion deal requires only the approval of the FCC in order to close. It was proposed more than a year ago and was expected to close a few months later, but has instead faced a protracted delay. The FCC turned the wait into a more fraught situation by saying it planned to refer the merger review to an administrative law judge, a move that is tantamount to killing the deal. Standard General responded by filing suit and the NAB has already weighed in with an amicus brief in support of the suit.
At a time when the broadcast business model “is being upended,” the FCC’s decision to call into question a deal “raises serious concerns,” LeGeyt said. He alluded to the case during wide-ranging remarks Monday morning at NAB, which is continuing its post-Covid comeback with a four-day edition filling the Las Vegas Convention center and spilling into the nearby Strip.
M&A is not the only area where the NAB has its eye on its Washington neighbors. “We’re focused on leveling the playing field with Big Tech on Capitol Hill,” LeGeyt said. One aspect of that, he said, is making sure the “right rules of the road exist at the FCC when our content is distributed on OTT platforms and making sure the FCC takes a look at that.” Many station owners have been at odds with virtual pay-TV operators like YouTube and Fubo when it comes to retransmitting their local signals.
Rules governing media ownership are another concern at the NAB. Historically, TV station owners have operated under a strict cap enforced by the FCC, which allows a single owner to have stations reaching no more than 39% of U.S. households. Station executives for years have said the rule is antiquated in a world of streaming, in which they compete against the likes of Google, Amazon and Meta Platforms, not just each other. The FCC’s most recent review of the rules in 2018, under a process that happens every four years, has still not been completed. The FCC is effectively “kicking the can on this another several years,” as the challenges in going up against the less-regulated tech sector only grow, the NAB chief added.