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Gigi Sohn's FCC confirmation impacts Standard General's Tegna deal

Jan 24, 2023

Gigi Sohn. Photo: Pete Marovich-Pool/Getty Images

Whether or not Standard General's $5.4 billion deal for Tegna gets approved could come down to the Biden administration's success — or failure — in finally breaking the FCC's deadlocked commission.

Why it matters: The clock is ticking on the deal, and so are the fees. The nearly yearlong deal approval is making Tegna more expensive due to "ticking fees," or advisory payments that go up as the deal lags.

  • The transaction already hit one set of ticking fees when the deal, first agreed to on Feb. 22 of last year, reached the nine-month mark. A second ticking fee gets added if the deal isn't closed by Feb. 22.
  • That fee would cost Standard General more than $500,000 per day, according to the deal terms announced last year.

The latest: Standard General's managing partner, Soo Kim, held a conference call with the media on Monday, three days after the FCC's deadline for comments on the deal.

  • Kim did not say how much longer past the one-year mark Standard General would try to keep pushing to close the deal, but he remained optimistic they would still get the deal done.
  • "We're optimistic and obviously would prefer economically to get this done during the current ticking fee that's in place today," Kim said. "I wouldn't say that we are that focused on what happens if we extend. We are very focused on getting it done in the here and now."

The intrigue: Biden re-nominated Gigi Sohn, whose confirmation was stalled during the last congress, to be the fifth FCC commissioner this month. The hope this time is that a wider Democrat majority in the Senate will make it easier to get her confirmed.

  • The FCC has been gridlocked since Biden was inaugurated with two Democrats and two Republicans on the commission, which has stunted any movement on major policy for the last two years.
  • However, hitting that Feb. 22 date looks unlikely because her confirmation hearing could be several weeks away.

What's next: Without a fifth commissioner, Standard General faces the very real prospect of a split vote next month, which would leave it one short of the three "yes" votes to get FCC approval.

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