Terrier Now Seeking to Sell Ohio Newspapers, Granted 2-Month Extension
Terrier Media wants to sell the Ohio daily newspapers acquired from its buy of Cox’s stations, said an FCC Media Bureau letter posted Wednesday in docket 19-98. Terrier planned to reduce the daily publication schedule of the papers -- which include the Dayton Daily News -- to three days a week to comply with the restored newspaper/broadcast cross-ownership rules (see 1911220069). It was granted an extension of the deadline to arrange the sale, said the Media Bureau. The Thursday deadline to reduce publication was extended to March 16.
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Former Commissioner Michael Copps, now with Common Cause, said the planned sale doesn’t mollify his concerns about the transaction and simply raises more questions. Copps and Dayton Mayor Nan Whaley (D) criticized Terrier and the agency over the matter, in a recent newspaper column (see 2001020034). “It would be better if the FCC had complied with the rules in the first place,” Copps said Wednesday in an interview.
Terrier has “commenced a sales process” for “complete divestiture” of the papers and “four unaffiliated potential buyers” have expressed interest, the bureau letter said. Though Terrier’s initial request for an extension doesn’t appear to be available in the FCC’s online filing systems, a footnote said it was filed Jan. 9, a week before the deadline to reduce publication of the papers. “The Dayton Newspapers are fully integrated with its broadcast properties in that market,” Terrier said. “This complicates the divestiture process because the newspaper operations must be separated from the other media companies as part of the sale.”
The company "contends that the requested extension would save the Dayton Newspaper readers and advertisers from the disruption that reducing the publication schedule would cause and would help preserve the Dayton Newspapers’ trusted relationships with Dayton readers," the bureau letter said. Preserving reader goodwill "will be crucial to the long-term success of the newspapers,” it said. Granting the extension is in the public interest because it will preserve "the ability of the Dayton Newspapers to maintain continuous daily readership until a buyer for the Dayton Newspapers is finalized," the bureau said. It also noted Terrier promised not to seek a further extension of the deadline.
Terrier and Whaley’s office didn’t respond to questions about the timing and reasons for the divestiture. The FCC and NAB declined to comment.
Anti-consolidation groups that opposed the FCC’s approval of the Terrier deal said the proposed divestiture seems positive but raises concerns. “At least on its face it seems better than reducing publication frequency,” conceded Free Press Policy Manager Dana Floberg. Terrier describes the potential buyers as unaffiliated, but their independence can’t be assessed without knowing their identity, said Common Cause Program Director-Media and Democracy Yosef Getachew. The buyers could be private equity firms similar to Apollo Global Management, said Copps. Apollo doesn’t technically own Terrier, but the Media Bureau ruled it exerts de facto control over the broadcaster (see 1911250067).
Getachew expressed concern about a shared service arrangement Terrier proposed with the new buyer. To “facilitate” the separation of the papers from Terrier’s broadcast stations, Terrier will offer the buyer a “transition services agreement” under which it “will provide the buyer with certain specified services at Terrier Media’s cost for a period of no longer than 180 days following the closing.” Though the extension letter specifies a sunset for the agreement, the lack of clarity about the arrangement raises questions, Getachew said. The agreement "covers services that are primarily back-office and is limited in duration," said the Media Bureau letter. The arrangement "is consistent with prior temporary support service agreements that the Commission has approved." Terrier is required to provide the agency a copy of the agreement within 30 days of selling the papers "because the final negotiated terms of the TSA are not known at this point."
Separating the papers from broadcast operations could potentially increase the number of news operations serving Dayton, Floberg said. In previous filings, Terrier described the newspaper and broadcast operations in Ohio as intrinsically linked. “Those sorts of synergies benefit broadcaster bottom lines far more than they benefit communities,” Floberg said. The FCC shouldn’t have allowed Terrier to “jump through hoops” to get the deal approved, Copps said. “That in no way serves the public.”