A union lawyer arguing that the $5.4 billion purchase of broadcaster Tegna Inc. by hedge fund Standard General LP will corrode democracy and should be blocked is also a lobbyist for three companies that stand to benefit financially if the deal dies.
(Bloomberg) — A union lawyer arguing that the $5.4 billion purchase of broadcaster Tegna Inc. by hedge fund Standard General LP will corrode democracy and should be blocked is also a lobbyist for three companies that stand to benefit financially if the deal dies.
Standard General’s co-founder Soo Kim, a rising star in the hedge fund world, sees Tegna as a way to cement his reputation as a turnaround artist amid changes in the broadcast industry. The union argues that the deal would wreck local journalism and hurt free speech.
Behind the scenes, dynamics are more complicated in the often opaque world of Washington lobbying, involving Wall Street, lobbyists, powerful law firms and media tycoons.
David Goodfriend, who represents the Communications Workers of America’s NewsGuild in proceedings before the US Federal Communications Commission, has been arguing for months against the Standard General-Tegna tie-up.
Left undisclosed in the filings he provided to the FCC is that he also has three clients that have a financial interest in quashing the deal: the Weather Channel, Entertainment Studio Networks and Dish Network Corp.
It’s legal for lawyers representing groups before the FCC to have other clients and they aren’t required to disclose them. But the undisclosed relationships highlight how significant financial interests often operate in the background at the intersection of corporate, political and regulatory power in Washington.
New York-based Standard General is getting help financing the Tegna deal from Apollo Global Management Inc. — which owns TV stations and has also tried to buy Tegna several times.
Goodfriend said in an interview that he opposes the takeover because it would “open the door to Wall Street predatory funds doing to local broadcasting what they’ve already done to newspapers — lay off journalists, sell off assets, and leave local news deserts in their wake.” He said the deal “represents the opposite of what I stand for and care about.”
Goodfriend said the NewsGuild is the only entity that pays him to lobby against the Tegna-Standard General transaction and that FCC staff likely know that he also represents the other companies because he’s had meetings with them on behalf of these clients in other contexts. He agrees there should be more robust financial disclosure rules for law firms representing clients before the agency.
Jon Schleuss, president of the NewsGuild-CWA, said he has “been aware of David’s other clients, but they don’t affect the work we’re doing.”
“Our top concern is fighting hedge fund ownership of local news,” Schleuss said. “We have lost tens of thousands of jobs in the last decade and we can’t lose even more with another hedge fund takeover.”
Goodfriend is a registered lobbyist for the Weather Channel and Entertainment Studio Networks, two companies owned by media mogul Byron Allen, who also tried to buy Tegna but lost out to Standard General. In addition, Goodfriend represents Dish, which is a member of a trade group that has criticized the Tegna-Standard General deal.
Goodfriend was Dish’s vice president of law and public policy from 2001 to 2008 and has maintained a close relationship with the company.
Dish said it doesn’t pay Goodfriend for any of his work at the FCC, including his opposition to Tegna-Standard General. Standard General and Tegna didn’t respond to requests for comment.
Harold Feld, a telecom expert with advocacy group Public Knowledge, said it’s “pretty common for lawyers to represent clients with aligned interests.”
Still, disclosure is typically a “professional courtesy,” said Craig Holman, a lobbying expert with watchdog group Public Citizen.
“The FCC operates on the basis of transparency when it comes to all of its orders and issues,” said Holman. “It seems uncommon that a party before the FCC is not disclosing their financial conflicts.”
After failing in his initial effort to buy Tegna, Standard General’s Kim reached out to Apollo to see if they might team up on the deal.
White-shoe lobbying firm Brownstein Hyatt Farber Schreck LLP, which is arguing in favor of the deal before the FCC, counts both Apollo and Standard General as clients. The firm has represented New York-based Apollo for decades and picked up Standard General as a client when the Tegna takeover began. Brownstein’s FCC filings related to the deal disclose that it represents Standard General.
Al Mottur, a Brownstein lawyer representing Standard General before the FCC, is a registered lobbyist for Apollo as well as Standard General. Mottur said Brownstein represents only Standard General before the FCC and Apollo won’t have any involvement in the company after the transaction. Critics, including Goodfriend, have raised concerns that Apollo is a quiet force behind the tie-up.
The Justice Department, which under President Joe Biden is taking a closer look at private equity’s impact on industries across the country, is scrutinizing the deal over concerns that it could lead to higher cable prices. Goodfriend is representing the NewsGuild in the Justice Department proceedings as well.
Even though Standard General agreed to waive contractual rights that could have allowed it to impose higher fees on pay-TV distributors, the union and the American Television Alliance, of which Dish is a member, say concerns remain that the deal could lead to higher cable prices.
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