The FCC has approved Nexstar’s $6.2 billion purchase of Tegna, signaling a major shift in ownership caps at both the local and national level.
The approval will form new duopolies of top-four network affiliates in many markets, including Des Moines (WHO-TV/13 NBC and WOI-TV/5 ABC) and the Quad Cities (WQAD/8 ABC and WHBF/4 CBS).
The sale also puts NBC affiliate KARE/11 (Minneapolis) under Nexstar ownership, marking the first time in a quarter century that a major Twin Cities affiliate has been sold.
The deal received FCC approval on March 19 and Nexstar announced closing of the deal within hours. The developments came after eight states and DirecTV filed lawsuits in an attempt to stop the sale.
A news release quoted Nexstar Founder, Chairman, and CEO Perry Sook as saying, “This transaction is essential to sustaining strong local journalism in the communities we serve. By bringing these two outstanding companies together, Nexstar will be a stronger, more dynamic enterprise—better positioned to deliver exceptional journalism and local programming with enhanced assets, capabilities, and talent. We are grateful to President Trump, Chairman Carr, and the DOJ for recognizing the dynamic forces shaping the media landscape and enabling this transaction to move forward.”
With the deal complete, it appears Nexstar has 265 stations in 132 markets, with two top-four network affiliates in about 30 markets.
To receive approval, Nexstar agreed to divest six stations: KTVD (Denver), WTHR (Indianapolis), WCTX (New Haven-Hartford), WAVY-TV (Portsmouth, Va.), WUPL (Slidell-New Orleans), and KNWA-TV (Rogers, Ark.). All are markets where the combined Nexstar-Tegna will still have two major network affiliates after the divestitures, which will take place within two years.
Numerous public interest groups, cable companies, and satellite providers opposed the sale. The FCC’s memorandum opinion and order approving the sale states, “the FCC’s analysis and the record shows that they have failed to establish any relevant harms in the markets they define—or at least no harms that are not more than offset by the consumer benefits that will flow from this Transaction.”
The FCC says “the record does not support” concerns that the transaction will result in a reduction of local news. It also says petitioners “fail to show relevant harms” to the local advertising spot market, saying “they ground their arguments in an outdated and unduly narrow view of the competitive environment.” And, the FCC says opponents failed to show that the deal will allow Nexstar to charge more for cable and satellite retransmission.
“As indicated above, we also conclude that Petitioners and Opposing Commenters have largely ignored the features relevant to today’s media environment. Their arguments would be more relevant and meaningful if the media environment looked more like the one that existed decades ago. But today, broadcasters are competing in a much larger, broader, and competitive environment. They are competing against digital advertisers and they are competing for viewers and listeners against various technology platforms—from streamers to podcasts. Broadcasters are no longer competing against other broadcasters, but against competitors that deliver their offerings over the Internet, from satellites in orbit, over 5G networks, over fiber, and over cable plus other technologies or modes of distribution. When placed in its proper market context, the harms and arguments pressed by this Transaction’s opponents melt away and are otherwise offset by the substantial, competitive benefits as well as the benefits for the FCC’s core media policy goals of competition, localism, and diversity.”
-FCC memorandum opinion and order, March 19
The FCC says Nexstar has committed to increasing local programming and will continue at the increased level for at least two years.
Approval of the deal required a waiver of the national ownership cap and waivers of local ownership rules in more than a dozen markets where the deal results in Nexstar owning three full-power stations. Those three-station markets will include Des Moines and the Quad Cities, where the combined company owns CW affiliates KCWI/23 (Ames) and KGCW/26 (Burlington) in addition to the network affiliates listed above.
Nationally, it appears the new Nexstar owns stations reaching about 80% of TV households, though when the FCC’s UHF Discount is factored in, the figure for regulatory purposes is 54.5%. Each figure is far higher than the previous national cap of 39%.
In a news release announcing the approval, FCC Chairman Brendan Carr stated, “For too long, the FCC stood by while newspapers closed by the dozen in communities all across the country. Those trusted sources of local news and information shuttered while the FCC dithered. If you care about local news, you should care about the future of local broadcast TV stations. Often, they are the ones in a market doing the gumshoe reporting that citizens value and need. By approving this transaction, which allows Nexstar to own less than 15% of television stations, the FCC acts mindful of the media marketplace that exits today—not the one from decades past—and the agency ensures that these broadcasters have the resources to continue investing in their local news operations.”
The approval drew condemnation from Democratic FCC Commissioner Anna Gomez, who called it a “closed-door approval” and asserted that the 39% national ownership cap is still in place.
“Local journalism is under extraordinary strain. Across the country, newsrooms are being consolidated, reporters laid off, and editorial decisions made far from the communities broadcast stations are licensed to serve. The Nexstar/TEGNA merger will accelerate exactly that trend, concentrating broadcast power in fewer corporate hands, shrinking independent editorial voices, and prioritizing national business interests over local needs,” Gomez wrote.
Nexstar’s existing regional holdings also include stations in Bismarck, Green Bay, La Crosse, Rapid City, Sioux City, and Sioux Falls (markets where Tegna did not have any stations). Nationally, Nexstar owns The CW and the NewsNation cable channel, which is heavily promoted by its local stations.
Disclosure: Jon Ellis is an employee of Gray Media Group. The statements and views expressed in this posting are his own and do not reflect those of Gray Media Group.