(Bloomberg) — TV station owner Tegna Inc.’s $5.4 billion sale to private equity buyer Standard General LP is coming under more scrutiny from US regulators after critics said the deal would boost prices for consumers.
In a letter Friday, the Federal Communications Commission posed a series of questions, including how the deal for 64 TV stations would improve local broadcasting.
The administration of President Joe Biden is moving to crack down on mergers, reflecting concerns about widespread consolidation across industries. The FCC, an independent agency, is led by a Biden appointee.
In its letter, the FCC asked whether the companies plan to coordinate with private equity firm Apollo Global Management Inc., which is helping to finance the deal. The New York-based investment firm is acquiring preferred equity in the transaction that doesn’t have governance rights.
The agency also asked about possible strategies for negotiating agreements with cable providers for rights to carry TV station signals and inquired about “anticipated staffing reductions.” It set a June 13 deadline for responses.
Tegna and Standard General didn’t respond to requests for comment. Apollo declined to comment.
Standard General, a private equity firm led by its chairman, Soo Kim, agreed to acquire Tegna in February for $24 a share, consummating a years-long takeover saga for the television broadcaster.
On May 20, the FCC allowed critics of the proposed acquisition more time to make their case, after a union and consumer advocates said the deal would let private equity firms increase the prices Tegna charges pay-TV providers to carry its stations, raising costs for consumers.
Shares of McLean, Virginia-based Tegna fell as much as 1.9% after the FCC’s letter was published but were little changed at $21.96 at 1:28 p.m. in New York.
(Updates with responses from parties in sixth paragraph.)
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