Such companies have not always treated media assets gently. Since the Denver Post was purchased in 2010 by Alden Global Capital, an investment outfit typically referred to as a hedge fund, the paper has been hit with staff downsizing and resource shrinkage. But if the TEGNA transaction has triggered such concerns, management at 9News, among the most prominent of the enterprise's 64 stations in 51 markets, isn't talking about it.
Mark Cornetta, 9News president and general manager, passed along Westword's inquiry about the sale to the corporate communications team, which responded by sharing the note sent to all TEGNA employees regarding the sale announced on February 22. The text, co-authored by former 9News executive Dave Lougee, includes this: "We are operating from a position of strength and generating record results with a resilient business model."
Meanwhile, 9News's own reporting on the deal manages not to identify either Standard General or Apollo Global Management as private-equity firms. Instead, the piece emphasizes that the new TEGNA "will become the nation’s largest minority-owned, woman-led broadcast group," since Standard General's chief executive officer, Deb McDermott, and founding partner, Soo Kim, will serve as CEO and chairman of the board under the new configuration.
Diversity has been a controversial topic at the station since March 2021, when Westword published "LatinXed: 9News Got Rid of Three Latina Reporters This Past Year, Including Me," an essay by former 9News reporter Lori Lizarraga. That July, numerous employees told Westword that 9News could be a hostile workplace for young female employees in general; a few months later, the station hired Jesse Ogas to serve as executive director of social responsibility and community affairs, a position that, among other things, called for him to address any claims of bias or racial insensitivity.
According to an article by the Hollywood Reporter, which used the term "private-equity firms" in its headline, the TEGNA sale "has an equity value of approximately $5.4 billion and an enterprise value of approximately $8.6 billion, including the assumption of debt." Once the deal is closed (no timeline was provided, but TEGNA's board has already given its blessing), stations in Austin, Dallas and Houston are expected to wind up in the portfolio of another media heavyweight, Cox Media Group. But there's no mention of such a prospect for 9News, whose future will be dictated by real-world concerns, not carefully shaped messaging.
Here's the note about the sale sent to TEGNA employees:
Dear Colleagues,
We have just announced that TEGNA has reached an agreement to be acquired by affiliates of Standard General L.P. and become a private company. Our press release is attached.
We want to recognize that the strength of our company, including our financial and operational performance as well as our award-winning journalism and marketing solutions, is a result of your hard work and stellar execution. We would not have reached this milestone nor attracted interest from so many potential partners over the past few years without you.
As you know, following TEGNA’s successful transformation into a pure-play broadcaster in 2017 and subsequent strategic acquisitions, we are now a leading local news and content provider. Thanks to you, we are operating from a position of strength and generating record results with a resilient business model that’s well positioned for the future.
We did not put TEGNA up for sale, but it’s not surprising that we have experienced continuing inbound acquisition interest over the past few years.
We realize this transaction with Standard General may be an unexpected development after the proxy contests of the past two years. However, we and Standard General have since gotten to know each other, and in carefully evaluating this and other strategic alternatives against our standalone prospects, as is our obligation, the Board determined that this transaction is in the best interests of TEGNA and our shareholders.
Importantly, as a private company, TEGNA’s purpose of serving the greater good of our communities will not change. Our commitment to building a more diverse, equitable, and inclusive culture at all levels of the Company has been a priority, and we aim to further increase representation of Black, Indigenous and People of Color across our business and ensure our content, through our focus on inclusive journalism, reflects the communities we serve.
During a lengthy evaluation and negotiation process, Standard General learned more about our work in these areas and let us know that they value and embrace the growth and transformation we are driving. They have clearly stated their commitment to continuing to serve our viewers, customers, and communities with professionalism and integrity. In fact, through this transaction, TEGNA will become the nation’s largest minority-owned broadcast group. Nothing is more important to us than maintaining the excellence of our content and supporting the continued growth and development of our people.
While we work to complete the transaction, which we expect to occur in the second half of 2022, subject to approval by TEGNA shareholders, regulatory approvals, and other customary closing conditions, we will continue to operate as we do today. From now until the transaction closes, it is business as usual and it will remain as important as ever that we keep the same focus we have always had on delivering outstanding journalism, marketing solutions and results. Further, we do not anticipate there will be any changes to your role, day-to-day responsibilities, pay, benefits, or paid time off that are out of our ordinary course of business.
After the transaction closes, Dave will step down and Deb McDermott will assume the CEO role. Soo Kim, Managing Partner and Chief Investment Officer of Standard General, will become Chairman of a newly formed Board.
Deb is currently CEO of Standard Media and has more than 20 years of experience leading companies in the broadcasting industry, including as COO of Media General and CEO of Young Broadcasting. Deb was inducted into the Broadcasting & Cable Hall of Fame in 2013 and has served as Chair of the National Association of Television Program Executives (NATPE) and the ABC Affiliate Board of Governors, and as a member of the Boards of the National Association of Broadcasters (NAB) and the Television Bureau of Advertising (TVB). She currently serves on the board of directors of the Country Music Association (CMA).
We have the utmost confidence that she has the right skills and experience to continue growing the Company while upholding our purpose and values including inclusivity, journalistic integrity, and commitment to our communities.
Following the close of the transaction, our stations in Austin (KVUE), Dallas (WFAA and KMPX) and Houston (KHOU and KTBU) are expected to be acquired by Cox Media Group (“CMG”) from Standard General. Like TEGNA, Cox Media Group owns some of the best stations in America, and wanted to pair our great stations in Austin, Dallas and Houston with their portfolio. Dallas-based corporate groups, specifically HR operations and multiple corporate sales teams including sales leadership and enablement, national sales, digital sales and ad ops, traffic and TEGNA Marketing Solutions, will continue as part of TEGNA.
Also after closing, Premion is expected to operate as a standalone business majority owned by CMG and Standard General. We are pleased that Premion will continue to serve TEGNA stations and its existing relationships will continue.
As Standard General is not another large broadcaster with an existing infrastructure, we expect the vast majority of TEGNA employees, including station personnel as well as corporate staff and those in centralized service operations, will continue with the new private company. We also expect similar continuity for those employees that will be joining CMG.
We realize that this transaction has several moving parts and will do our best to share additional information as it becomes available.
Thanks again for all you do for TEGNA.
Dave Lougee
Howard D. Elias
President and CEO
Chairman of the Board
