Standard Media CEO Deb McDermott tried to calm rumors and concerns that when and if her company takes over Tegna, the new company might cut staff.
In a highly unusual move during a takeover, and with takeover approval still in the hands of the Federal Communications Commission, McDermott sent a memo to Tegna workers that included one paragraph in bold font for emphasis:
You may have read comments in the press from groups opposing the transaction speculating that Standard General will be cutting journalism and laying off journalists at the Company’s stations. These comments are simply untrue.
Standard General and I have always placed a high value on local journalism and have no intention, and have never had the intention, of reducing news or news staff at TEGNA stations. In fact, and as we have represented to the FCC, we do not intend to reduce station-level staffing following the transaction.
To the contrary, we expect to compete vigorously in all markets, which will require continued investment in local journalism and newsgathering operations.
Our commitment to journalism is backed by both Standard General’s and my track records of leading local broadcast groups over the last 12 years, including those at Young Broadcasting, Media General and most recently, Standard Media Group.
The CEO’s email follows what Standard General — the investment firm that owns Standard Media — calls “bewildering” scrutiny from the FCC. The FCC asked for detailed information about Standard General’s plans for staffing and serving the public interest, and how it plans to handle retransmission agreements with cable and satellite companies. The FCC issued a protective order that would require the company to send confidential information to the government that would not have to be released to the public.
Groups including Common Cause, the NewsGuild-CWA, and Public Knowledge have openly opposed the takeover and asked the FCC to delay the approval.
The speculation that Standard General might cut staff may be rooted in the sticky takeover war of words. Standard General head Soo Kim has been critical of Tegna’s leadership, even while attempting to buy the company. In April 2020, Standard General issued a detailed attack on Tegna’s profitability that included a reference that worried Tegna employees. It posted this graphic, in which it said Tegna stations have “2x the number of employees per station compared to peers” but lags behind its peers in profitability.
(Standard General SEC filing, April 13, 2020)
Standard General did not say that Tegna was overstaffed, but the comparison was unsettling to employees who look at what has happened in the newspaper industry when private equity fund managers take over media companies and slash staff. Industry observers point out that Tegna stations are mostly in larger markets than industry peers, although both Nexstar and Gray have added big market stations to their portfolios in recent years.
In her email, McDermott does not outright say there will be no layoffs or staff cuts — nobody can make such predictions — but she did say that her own track record as a media executive shows her dedication to journalism:
Having been a station general manager and working with newsrooms for more than 30 years, I firmly believe that strong local journalism is an essential component to a successful local broadcast station.
While I will have much more to share with you in the future about our post-closing plans, I wanted you to hear these points from me and reiterate our commitment to building on the many successes you have already achieved. I look forward to meeting you in person in the future and to working with you all to create new opportunities for the Company.
