The Biden administration has a clear choice: It can stand with journalists and the American people or it can stand with anonymous foreign investors and Wall Street mega-funds, The NewsGuild told the president in a July 25 letter.
The Department of Justice and agencies that review foreign investments should reject the proposed takeover of TEGNA, a major local broadcaster, by a hedge fund and its private equity financiers, NewsGuild President Jon Schleuss wrote.
The proposed takeover by Standard General, a hedge fund, and Apollo, a private-equity fund, pose a threat to local journalism, Schleuss said.
“Our members – America’s journalists – overwhelmingly call for public policy to prevent hedge fund ownership of news outlets,” he said. “The carnage in America’s newsrooms proves why: these funds pay for their debt financing with jobs cuts.
“The Wall Street takeover artists argue that they do not ‘intend’ to cut jobs, but conspicuously fail to put their money where their mouths are with legally binding commitments to preserve jobs,” he wrote.
The TEGNA deal also lacks transparency, Schleuss said. Standard General and its financiers have failed to document whose money they are investing. They have admitted that much of the capital comes from unnamed foreign sources, but have declined to disclose any details. Apollo even asked the FCC to rule that a fund containing 100% foreign investment can hold all U.S. broadcast licenses in the deal, despite a legal requirement that caps foreign ownership of U.S. broadcasters.
Standard General and its financiers have also failed to stipulate whether they have agreed to cut costs at the expense of hardworking Americans in order to pay the interest on the enormous debt they would incur if the deal is approved, Schleuss said.
He also charged the firms with price fixing and collusion, noting that the proposed TEGNA takeover includes a complex set of transactions designed to substantially increase the fees charged by TEGNA’s additional TV stations and to pass those increases onto paid-TV subscribers.
He urged the president to stand with journalists and American families and reject the ploy of hedge funds backed by anonymous foreign investors.