Other matters

12 Months Ended

Dec. 31, 2021

Commitments and Contingencies Disclosure [Abstract]

Litigation: In the third quarter of 2018, certain national media outlets reported the existence of a confidential investigation by the United States Department of Justice Antitrust Division (DOJ) into the local television advertising sales practices of station owners. We received a Civil Investigative Demand (CID) in connection with the DOJ’s investigation. On November 13 and December 13, 2018, the DOJ and seven other broadcasters settled a DOJ complaint alleging the exchange of competitively sensitive information in the broadcast television industry. In June 2019, we and four other broadcasters entered into a substantially identical agreement with DOJ, which was entered by the court on December 3, 2019. The settlement contains no finding of wrongdoing or liability and carries no penalty. It prohibits us and the other settling entities from sharing certain confidential business information, or using such information pertaining to other broadcasters, except under limited circumstances. The settlement also requires the settling parties to make certain enhancements to their antitrust compliance programs, to continue to cooperate with the DOJ’s investigation, and to permit DOJ to verify compliance. We do not expect the costs of compliance to be material.

Since the national media reports, numerous putative class action lawsuits were filed against owners of television stations (the Advertising Cases) in different jurisdictions. Plaintiffs are a class consisting of all persons and entities in the United States who paid for all or a portion of advertisement time on local television provided by the defendants. The Advertising Cases assert antitrust and other claims and seek monetary damages, attorneys’ fees, costs and interest, as well as injunctions against the allegedly wrongful conduct.

These cases have been consolidated into a single proceeding in the United States District Court for the Northern District of Illinois, In re Local Television Advertising Litigation, 1:18-cv-06785, filed on July 30, 2018. At the court’s direction, plaintiffs filed an amended complaint on April 3, 2019, that superseded the original complaints. Although we were named as a defendant in sixteen of the original complaints, the amended complaint did not name TEGNA as a defendant. After TEGNA and four other broadcasters entered into consent decrees with the DOJ in June 2019, the plaintiffs sought leave from the court to further amend the complaint to add TEGNA and the other settling broadcasters to the proceeding. The court granted the plaintiffs’ motion, and the plaintiffs filed the second amended complaint on September 9, 2019. On October 8, 2019, the defendants jointly filed a motion to dismiss the matter. On November 6, 2020, the court denied the motion to dismiss. Fact discovery is now underway and, under the current schedule, is expected to be completed by December 30, 2022. We deny any violation of law, believe that the claims asserted in the Advertising Cases are without merit, and intend to defend ourselves vigorously against them.

We, along with a number of our subsidiaries, also are defendants in other judicial and administrative proceedings involving matters incidental to our business. We do not believe that any material liability will be imposed as a result of any of the foregoing matters.

Commitments: The following table summarizes the expected cash outflow related to our commitments related to licensed broadcast agreements that are not recorded on our balance sheet as of December 31, 2021. Such obligations include future payments related to our programming contracts (in thousands). See Note 7 for further information on our lease commitments. We have $1.35 billion of commitments under programming contracts that include syndicated television station commitments to purchase programming to be produced in future years. This also includes amounts related to our network affiliation agreements. Certain network affiliation agreements include variable fee components such as a rate per number of subscribers, which in have been estimated based on current subscriber levels and reflected in the table below.


Year	Programming Contracts
2022	$	808,378
2023	527,113
2024	10,224
2025	4,371
2026	2,823
Thereafter	398
Total	$	1,353,307

Major Customers: Customers that purchase our advertising and marketing services are comprised of local, regional, and national advertisers across our markets. Our subscription revenue customers include cable operators and satellite providers for carriage of our television stations. In 2021, two customers purchased both advertising and marketing services and paid us compensation related to retransmission consent agreements, which payments in the aggregate represented more than 10% of consolidated revenues in 2021. These customers represented $410.8 million and $399.7 million of consolidated revenue in fiscal year ended December 31, 2021. In 2020 we had one major customer that purchased more than 10% of our revenue with $393.4 million, while we had two customers that purchased more than 10% of our revenue with $270.3 million and $251.2 million in 2019.

Related Party Transactions: We have an equity and debt investment in MadHive which is a related party of TEGNA. In addition to our investment, we also have commercial agreements with MadHive where they support our Premion business in acquiring OTT advertising inventory, as well as delivering and tracking the ad impressions. During the year ended December 31,

2021, we incurred expenses of $80.3 million as a result of the commercial agreements with MadHive. During the years ended December 31, 2020 and 2019, we incurred $55.1 million and $34.3 million of expenses respectively, under the commercial agreements. These expenses are recorded as “Cost of revenue” on our Consolidated Statements of Income. As of December 31, 2021 and 2020 we had accounts payable and accrued liabilities of $8.9 million and $13.5 million, respectively.

In December 2021, we renewed our two existing commercial agreements with MadHive. Simultaneously with the commercial agreement renewals, we also amended the terms of our existing available-for-sale convertible debt security with MadHive, which became effective on January 3, 2022. The amendments to the convertible debt agreement modified several items, including the conversion rights as well as the maturity date of the note. In exchange for the convertible debt modifications, we received favorable rates in our renewed commercial agreements. We estimated the fair value of our available-for-sale security at December 31, 2021 using a market fair value approach based on the cash we expect to receive upon maturity of the note and the estimated cash savings that the favorable contract rates will provide over the term of the commercial agreements. We expect to record a gain of $20.8 million in “Other non-operating items, net” in the Consolidated Statements of Income in the first quarter of 2022, when the terms of the amended convertible debt security become effective. In January 2022, we will also record an intangible contract asset for $20.8 million which will be amortized to expense over the noncancellable term of the commercial agreements of two years.

Sale of minority ownership interest in Premion: On March 2, 2020, we sold a minority ownership interest in Premion, LLC (Premion) for $14.0 million to an affiliate of Gray Television (Gray). In connection with that transaction, Premion and Gray entered into a commercial arrangement under which Gray resells Premion services across all of Gray’s 113 television markets. Our TEGNA stations and Gray each have the right to independently sell Premion’s inventory in markets where we both operate a local television station. The sale of spot television advertising is not part of this agreement, and Gray and our TEGNA stations continue to sell spot advertising for our respective stations without any involvement from the other party.

In connection with acquiring a minority interest, Gray has the right to sell its interest to Premion if there is a change in control of TEGNA or if the commercial reselling agreement terminates. Since redemption of the minority ownership interest is outside our control, Gray’s equity interest is presented outside of the Equity section on the Consolidated Balance Sheet in the caption “Redeemable noncontrolling interest.” On the date of sale, we recorded a $14.0 million redeemable noncontrolling interest on the Consolidated Balance Sheet in connection with Gray’s investment. When the redemption value or the carrying value (the acquisition date fair value adjusted for the noncontrolling interest’s share of net income (loss) and dividends) is less than the redemption value, we adjust the redeemable noncontrolling interest to equal the redemption value with changes recognized as an adjustment to retained earnings. Any such adjustment, when necessary, will be performed as of the applicable balance sheet date.