Journalists Beat Wall Street — I Street Advocates

The Communications Workers of America, including its division of journalists, The NewsGuild-CWA, warned for years that hedge funds and private equity funds were undermining local journalism in the U.S. by buying local newspapers, laying off most of the reporters, and then selling the real estate and other assets.

We worked with The NewsGuild-CWA President Jon Schleuss to bring this fight to the Federal Communications Commission (“FCC”). When private equity fund Apollo Global Management and hedge fund Standard General sought to acquire TENGA, the second-largest local broadcast TV station group in the U.S., we represented The NewsGuild-CWA, along with NABET-CWA, in opposing the deal.

Working with co-counsel Andrew Schwartzman, we raised objections before the FCC and the U.S. Department of Justice Antitrust Division. We assembled a coalition of consumer advocacy and civil rights groups to join the unions in opposing the transaction.

We focused our attention on the transaction’s potential impact on journalism jobs. When Standard General repeatedly asserted that it “did not intend” to cut jobs, we found confidential financial documents in emails between Standard General and its bankers that showed just the opposite.

We generated unusually strong statements of concern or outright opposition from then-House Speaker Nancy Pelosi; then-House Energy and Commerce Committee Chairman Frank Pallone (D-NJ); and especially Sen. Elizabeth Warren (D-MA).

On February 24, 2023, more than a year after the Wall Street funds filed their applications for approval, the FCC’s Media Bureau issued a hearing designation order (“HDO”) designating the transaction for a hearing before an Administrative Law Judge (“ALJ”). The order raised issues that reflected the two prongs of our opposition:

First, the HDO stated that there were two different stories about jobs – the unions’ and the applicants’-- and that given this issue of material fact, an ALJ should determine which narrative was accurate. Importantly, the order also stated that the number of local TV station jobs can reflect whether or not the broadcast licensee is serving the public interest with “localism.” For decades, CWA had tried to get the FCC to say that jobs matter. Finally, a formal FCC order said that they do.

Second, the HDO said that there were material issues of fact surrounding the seemingly deliberate effort to structure a deal in order to raise prices. It said that the involvement of a private equity fund mattered in determining whether the public interest was likely to be served. For years, The NewsGuild tried to get government officials to acknowledge the dangers of hedge funds and private equity funds taking over newsrooms. Now, finally, a formal FCC order acknowledged the importance of the issue.

With only three months until TEGNA would have the right to walk away from the deal, the HDO seemed like total victory, but the Wall Street billionaires behind the deal doubled down. They hired an army of lobbyists and secured letters from Sen. Ted Cruz (R-TX) and other Members of Congress criticizing the FCC’s Chairwoman. They hired legions of public relations specialists and got scathing op-eds and stories placed in The Wall Street Journal, New York Post, and trade publications, all designed to put pressure on the FCC to reverse course. They hired even more law firms and appealed the FCC action, first to the ALJ, then to the Commission, and finally to the D.C. Circuit.

We fought back and at every point, we beat our better-funded opponents. On Monday, May 22, 2023, TEGNA announced that it was terminating the transaction agreement with Standard General.

We won. Our client received emails from journalists at TEGNA expressing relief and gratitude. The Media Bureau’s order established important factors for examining hedge fund and private equity fund takeovers of broadcast TV stations. Perhaps most important, The NewsGuild, NABET, and all of CWA’s members showed Wall Street that America’s journalists no longer will stand on the sidelines as massive funds disassemble American newsrooms.