Tegna Blasts Standard General in Letter to Shareholders

In a letter to shareholders, Tegna defended its performance and attacked Standard Media, which is seeking seats on Tegna's board, as conflicted.

Last week Standard Media said it has an 8.7% stake in Tegna and put its founder, Soohyung Kim up for a board seat.

Tegna pushed back last week and this week is appealing to shareholders.

In its letter, Tegna said its board evaluated Kim. Based on this in-depth evaluation, the Board has serious concerns about Mr. Kim's prior board service. Many who know him well commented on his track record of endorsing and executing corporate actions in favor of his own interests to the detriment of other shareholders, as well as a dismissive attitude toward the perspectives of other directors, Tegna said in its letter.

Tegna also said that Standard General has conflicted because it has stake in two other companies that own media properties.

We believe that it is highly inappropriate for another industry operator to have access to Tegna's proprietary information, including our M&A pipeline, product development plans, R&D efforts, and partnership and affiliation strategies. Accordingly, the Board has unanimously determined that adding Mr. Kim to the Board is not in the best interests of Tegna and its shareholders, the letter said.

Tegna said that contrary to Standard General's assertions, it's board is open to all paths to create value.

It added that since becoming a pure-play TV company, two year total shareholders returns have been 23.6%.

Tegna is executing on its proven strategy to generate value through organic growth and targeted M&A. As a best-in-class operator in the markets we serve, with top-of-the-market retransmission rates and TSR performance well above our peers, Tegna is delivering for shareholders, the letter concluded. We will communicate regularly with you in advance of the 2020 Annual Meeting and thank you for your support.

Here is the text of the Tegna letter:

Dear Fellow TEGNA Shareholders,

Over the past several years, TEGNA has transformed its portfolio to become a pure-play broadcasting company, adding more than 40 stations in attractive markets and divesting non-core assets. As a result of this strategic evolution, TEGNA has generated attractive revenue and cash flow growth, reduced economic cyclicality and delivered value for shareholders.

TEGNA is now one of the largest U.S. broadcasting groups and a leading local news and media content provider in the markets we serve. Through the combination of our growing subscription and political revenues and our proven M&A track record, TEGNA is generating substantial free cash flow and shareholder value. Further, as a preferred M&A partner, TEGNA is well positioned to benefit as a platform for further industry consolidation.

The successful execution of TEGNA's strategy has delivered significant shareholder value. With the completion of our transformation into a pure-play broadcasting company following separation from Gannett in 2015, the spinoff of Cars.com in June 2017 and the sale of our remaining stake in CareerBuilder in July 2017, TEGNA today is a fundamentally different company and has outperformed its peers.

Post-transformation into a pure-play, TEGNA's two-year total shareholder return (TSR) in 2018-2019 was 23.6% relative to the peer median of 3.1%. Moreover, our one-year TSR in 2019 was 56.4% compared to the peer median of 29.0%. These are the appropriate time periods to evaluate the success of our current strategy, which was implemented after exiting our previously owned publishing and digital businesses. With our recent report of quarterly outperformance on January 9, the upward momentum of our stock price has continued into 2020.

TEGNA is focused on five pillars of value creation best-in-class operations, disciplined pursuit of M&A opportunities, innovation and expansion into adjacent businesses, maintaining a strong balance sheet and rapidly de-levering, and producing strong financial performance. We delivered revenues of $2.3 billion and Adjusted EBITDA of more than $700 million in 2019, and are positioned to take advantage of robust growth opportunities in 2020 and beyond.

A CONFLICTED INVESTMENT FIRM IS DEMANDING SEATS ON

TEGNA'S BOARD OF DIRECTORS

Since Standard General's disclosure in August 2019 of a position in TEGNA, our Board and management team have met on multiple occasions with Mr. Soohyung Kim, Standard General's Founding Partner, to learn about his perspective on TEGNA. In those meetings, Mr. Kim demanded a board seat for himself, but offered no concrete ideas to create shareholder value.

TEGNA's Board thoroughly evaluated Mr. Kim as a potential director. Board members, including the independent Chairman and members of the Nominating and Governance Committee, held several meetings with him, interviewed a number of people who have served with him on other boards (including those he offered as references), and conducted a detailed assessment of his track record and current investments in the broadcasting industry.

Based on this in-depth evaluation, the Board has serious concerns about Mr. Kim's prior board service. Many who know him well commented on his track record of endorsing and executing corporate actions in favor of his own interests to the detriment of other shareholders, as well as a dismissive attitude toward the perspectives of other directors.

As further described below, the Board is also concerned that Mr. Kim's significant investments in and influence over other broadcasting companies would create a conflict of interest as a TEGNA director, including with respect to potential investment opportunities in the sector. We believe that it is highly inappropriate for another industry operator to have access to TEGNA's proprietary information, including our M&A pipeline, product

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