Dave Lougee, CEO of native TV big Tegna, stated FCC Chair Jessica Rosenworcel and the Biden Administration have put “a restriction round our neck” with their enforcement of “antiquated” laws.
The exec was requested in regards to the proposed acquisition of Tegna by non-public fairness agency Customary Common throughout an look Thursday at Gabelli Funds’ annual Media & Leisure Symposium. The $8.6 billion transaction was terminated by the businesses final yr after scrutiny by the FCC. The fee is now led by Democrats, consistent with the customized of the political occasion within the White Home dictating the make-up of regulatory companies. Together with the Customary Common deal, the FCC has focused “sidecar” offers utilized by Nexstar and in any other case put native broadcasters on discover about their strict stance.
“We don’t think about a situation the place for us there’s going to be any particular M&A alternatives within the broadcast house” through the present FCC/Administration setup, Lougee stated. The FCC’s possession cap, which bars any single proprietor from controlling stations collectively reaching greater than 39% of U.S. households, “is successfully a constraint round our neck.”
There may be “great frustration within the ecosystem, and appropriately so, about an extremely antiquated regulatory construction that has been doubled down on by this explicit chair, and I assume I’d say Administration as nicely,” Lougee continued. “The dearth of actuality of that” will turn into obvious quickly, he predicted. Smaller teams, particularly these which are “over-leveraged or don’t have the stability sheets,” the exec added, may “begin to go beneath in just a few years,” which is able to “speed up adjustments within the regulatory system.”
So far as how Tegna is dealing with the regulatory considerations, Lougee stated native TV M&A is “off the desk” for the close to time period. However he famous this fall’s election, which will probably be a milestone for the working setting in native TV. “You inform me what the result of the election is after which I’ll begin to triangulate that, however we would as nicely simply wait to see after which, relying on which occasion’s in energy, we’ll begin to triangulate beneath that occasion,” he stated.
Previous to Lougee’s feedback, Sinclair CFO Lucy Rutishauser on the similar convention articulated comparable criticism in regards to the possession cap, noting that different media and tech sectors should not restricted by way of their attain to shoppers.
