WASHINGTON —In a landmark win against corporate greed and for community journalism, the News Guild, the Communications Workers and allies beat two rapacious hedge funds, Standard General and Apollo Global Management, which tried to devour local broadcaster Tegna and its news programs.
The two hedge funds called it a merger, a statement which drew a lot of skepticism. Tegna, the former media arm of the nation’s biggest newspaper chain, Gannett, controls broadcast stations in Denver, Indianapolis, Buffalo, Hartford, Conn., and 31 other cities.
The win came when time ran out on the hedge funds’ May 22 deadline to Tegna to agree to the $8.6 billion takeover. The News Guild-CWA, NABET-CWA, the Communications Workers, civic, consumer and civil rights groups and anti-trust advocates raised formal challenge hell with the Federal Communications Commission over the takeover’s impact on employment, broadcast news coverage and consumer choice. So the FCC staff kept raising questions—until the clock ran out.
The hedge funds withdrew their bid and, as a condition of the tentative agreement they had signed with Tegna, they had to pay it $136 million to break their pact when the financing deadline ended. The hedge funds feared they couldn’t find comparable financing after that date.
A win for the two hedge funds would have consolidated financier control over local TV broadcasters, letting the funds slash staff, close newsrooms, cut people and shave production costs to the bone. The losers would be consumers, viewers, and broadcast workers suddenly out of their jobs—even if they received union-negotiated severance pay.
Venal and vicious hedge funds, answerable often only to one prime investor in secret, have carried out similar depredations among the nation’s community newspapers, leaving “news deserts.”
That’s why the News Guild, a CWA sector, fought the takeover of Tegna. The Guild has had its own running battle against the most-rapacious hedge fund of them all, Alden Global Capital.
The patterns are the same; A hedge fund is a hedge fund: Swoop in, buy the property, sell the building, cashier the staff, cut the coverage and then sell out, at a big profit to the secret capitalists, leaving newsless communities and broken lives behind.
“This is a major victory for our union members, who have been fighting the hedge fund takeover of local news for more than a decade,” said News Guild President Jon Schleuss.
“For too long, hedge funds like Standard General, Alden Global Capital and Chatham Asset Management have taken over local newsrooms, taken on massive amounts of debt and cut jobs and local news coverage to service that debt. Today we secured a major victory in preventing yet another attempt by hedge funds to take over local news.”
The two CWA sectors and the union joined Common Cause and the United Church of Christ Media Justice Ministry in petitioning the FCC to reject the “merger, and safeguard the public’s right to weigh in on large broadcast transactions affecting local news and U.S. democracy.” They raised the broader
question of “private equity’s disastrous impact on U.S. media and media consolidation,” too. The FCC listened and agreed, Communications Workers President Chris Shelton said.
“The FCC stood up for media workers by scrutinizing a hedge fund’s attempt to take over and destroy more local news in the U.S.,” said Shelton. The union thanked the agency and its staff ”for finally doing what we have asked regulators to do for decades: Protect American jobs and hold Wall Street firms accountable.”
“Standard General and Apollo had multiple opportunities to provide more documents and failed to answer questions raised during this process,” said NABET President Charlie Braico. “Their failure to provide adequate answers led to the need for further scrutiny in front of a judge and their poor planning in financing timeline led to the deal’s demise.”
Had Apollo and its partner, Standard General, succeeded, it would have added Tegna’s 35 stations to the 14 TV stations and 52 radio stations of the Cox Corp. which Apollo already controls. “The relationship of the two major Wall Street funds raised serious questions about consolidation and control of dozens of local newsrooms,” CWA said.
“Sometimes, the process works and the needs of the public are put first. This is one of those times, ” Church of Christ Justice Ministry Policy Adviser Cheryl Leanza told CWA. “This transaction deserved every ounce of scrutiny it received. The hedge funds seeking approval of this deal did not produce the information, data and changes needed to get through the regulatory approval process.”
News Guild-CWA members have battled the hedge fund takeover of local newsrooms at the Denver Post, St. Paul (Minn.) Pioneer Press, Baltimore Sun, Chicago Tribune and dozens of other papers. The Denver staff actually walked out one day and picketed, demanding Alden sell their paper to investors who really care about local news, not just milking profits from assets. Such newsroom destruction by hedge funds, this time in broadcast, would have left more “news deserts.”
“Wall Street continues to destroy local news, resulting in fewer watchdogs at all levels of government across North America,” Schleuss said. Death of this deal “should serve as a warning to Wall Street funds scheming to take over local newsrooms and a lesson for them to work with journalist and media unions. We will continue to do what we have always done as journalists: Hold companies to account and defend democracy.”
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