Terrier/Cox Media Would Make Daily Papers Less Frequent to Follow Ownership Rules
Terrier Media is restructuring its deal to buy most radio and TV stations from Cox Media and Northwestern's TV outlets to be in compliance with the 3rd U.S. Court of Appeals Prometheus ruling, said Terrier President David Sambur in an amendment (see 1910250006). “Applicants have agreed to make certain targeted changes to the Northwest Transaction and the Cox Transactions to address any concerns regarding compliance with the Commission’s current and possible future media ownership rules,” the amendment said. It posted this week in the FCC consolidated database system.
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The buyer had maintained the regulator's fourth loss in the same court on media ownership wouldn't affect review of the takeovers that have antitrust OK (see 1910180027). A deal involving different companies was yanked, also amid MVPD concerns.
The Apollo Global Management equity fund sponsored the Terrier deal and is described as not holding an attributable interest. Sambur's an Apollo senior partner. To comply with newspaper cross-ownership rules restored by the court, Terrier promises to reduce the publication schedule of some daily newspapers involved in the deal to no longer be daily and turn in the licenses of two TV stations. Terrier “modified its transactions with Northwest Broadcasting and Cox Media Group to remove any possible conflicts should the Third Circuit ruling take effect,” a spokesperson said.
Without an appeal seeking an en banc rehearing, the 3rd Circuit's ruling would take effect within a week of the deadline for appeal, which most attorneys we spoke to agree is Nov. 7. If there's an en banc appeal as industry officials expect, the court's mandate would be held until a week after any appeal is resolved, a broadcast attorney said.
In the amended transaction, Terrier would change the publication schedule for three Ohio newspapers involved in the deal from daily to three times a week, the amendment said. This would prevent FCC rules barring co-ownership of daily newspapers and TV stations from scuttling the transaction, attorneys said. Cox would get an option to reacquire the newspapers and restore them to dailies if they can be extricated from Terrier's other media interests.
“At what point are groups who continuously challenge attempts to modernize the @FCC's media ownership rules held accountable for harming local journalism?” tweeted NAB General Counsel Rick Kaplan. “It's not 'public interest' when the result is less news.” An end result that reduces the publication of local newspapers highlights the absurdity of the newspaper cross-ownership rule, said former broadcast attorney Frank Jazzo.
"Those complaining that Terrier's situation is the fault of 'bad' ownership rules being restored are starting from the false premise that mergers are inherently good and anything that blocks those mergers is bad,” emailed Free Press Policy Manager Dana Floberg. “But the public doesn't need this merger.” Terrier could comply with the restored rules in other ways, including divestiture, she said. “When companies fail to live up to the public interest standard, we should demand better from those companies -- not lower our standards.”
Terrier would give up duopolies in Yuma, Arizona, and Syracuse by turning in the license of one TV station in each of those markets it would acquire from Northwest after the deal is approved. Terrier will transfer the programming of the surrendered stations to primary and multicast channels of the stations in those markets it retains.
The agreement will be restructured to reduce Cox's share in the final combination, making it non-attributable. Cox would have a 19.9 percent share and be unable to appoint Terrier directors.
Before the amendment, broadcast industry officials said it was possible the deal could be held up pending resolution of the FCC's appeal. Now, broadcast attorneys said the transaction could be approved sooner.
“The recent FCC filing addresses some additional regulatory matters raised as a result of the recent 3rd Circuit Court decision,” said a Cox spokesperson. “All parties remain focused on the path ahead.” Terrier's representative said it looks "forward to a prompt completion of the FCC approval process.”