FCC Approves Nexstar’s Acquisition of Tegna

WASHINGTON—On Thursday the FCC’s Media Bureau announced the approval of Nexstar’s acquisition of Tegna, a deal that has tested the limits of existing broadcast ownership rules.

The merger, valued at about $6.2 billion, will give Nexstar coverage of about 80% of U.S. households, controlling 265 stations across 44 states and Washington D.C., with Nexstar now owning major affiliates (ABC, CBS, NBC, and FOX) in 132 of the country’s 210 television markets. Such coverage gives Nexstar nearly double the 39% ownership limit typically allowed by the FCC.

In response to the approval, AGs in eight states filed to block the merger, claiming that it would increase costs for consumers and “consolidate newsrooms of previously separate Big 4 stations, degrading the content and quality of local news broadcasts.”

Since announced last August, just weeks after a federal appeals court vacated the FCC’s top four station ownership rule, the deal was perhaps the most brazen attempt by station groups to test FCC Chairman Carr’s attitude towards revising broadcast ownership rules. Broadcasters claim current rules are hampering their ability to compete with similar media operations owned by Big Tech. The FCC is currently in the public comment phase of considering new ownership rules as part of its 2022 Quadrennial Regulatory Review.

Carr—who has long advocated for such changes, applauded the court’s ruling last summer.

“For decades, the FCC’s approach to regulating the broadcast industry has failed to promote the public interest,” he said in August. “That has only made it harder for trusted and local sources of news and information to compete in today’s media environment. And that is why I dissented from the Biden-era FCC’s decision to retain a regulation that does not match marketplace realities. I am pleased to see that the court agrees and has vacated that regulation.”

Even more important was that the Trump administration approved of the deal, although it was based more on his dislike of “fake news,” than about ownership. Democrats in Congress lobbied against the merger, which also drew widespread media industry opposition from DirecTV, labor groups and even the right wing Newsmax cable channel.

To get to yes, Nexstar successfully obtained a waiver from the commission based on the company’s argument that the industry "needed more scale." Nexstar also made formal commitments to invest in local news and take steps to prevent the merger from leading to higher pay TV bills. In addition, Nexstar agreed to divest itself of the following TV stations:

• Little Rock, Arkansas (KNWA)
• New Orleans, Louisiana (WUPL)
• Indianapolis, Indiana (WTHR)
• Norfolk, Virginia (WAVY)
• New Haven, Connecticut (WCTX)
• Denver, Colorado (KTVD)

Perhaps trying to avoid a public protest that broke out during an FCC meeting last fall, the commission chose to approve the merger in a meeting that was closed to the public, which drew criticism from Anna Gomez, the lone Democrat on the commission, who opposed the merger.

“The FCC has once again chosen bureaucratic cover over public accountability. This merger was approved behind closed doors with no open process, no full Commission vote, and no transparency for the consumers and communities who will bear the consequences," Gomez said in a statement. "A transaction of this magnitude, which includes new and novel issues before the FCC, demands open deliberation before the full Commission, not a quiet sign-off meant to avoid public scrutiny. Given the increasingly alarming pace of reckless media consolidation, the American public deserves to know how and why this decision was made.

Although Gomez acknowledged the financial pressures local TV newsrooms are under, she said the Nexstar deal will not ameliorate such concerns.

"Across the country, newsrooms are being consolidated, reporters laid off, and editorial decisions made far from the communities broadcast stations are licensed to serve,:" she said. "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. Nexstar has already begun cutting newsrooms throughout the country, and as these billion-dollar companies grow even larger, their increased negotiating leverage will drive up fees that translate into higher monthly bills for those families who can least afford them. The consequences of this rubber stamp approval will be felt in living rooms and newsrooms across the country, resulting in fewer voices, less competition, and higher costs for consumers.”

As expected, the National Association of Broadcaster applauded the result.

“While NAB does not take a position on the merits of any individual transaction, today’s action by the FCC and DOJ to approve the Nexstar-Tegna merger is a meaningful sign that the Commission understands the urgent need for ownership reform,” NAB President Curtis LeGeyt said in a statement.

“We are grateful to Chairman Brendan Carr for his recognition that the national ownership cap is outdated and no longer reflects today’s media marketplace. This decision is an important acknowledgement that the media marketplace has changed and giving stations the ability to achieve greater scale is essential to sustaining trusted local journalism and emergency reporting. We look forward to continuing to work with the Commission as it modernizes its rules to ensure that broadcasters can continue to serve their local communities across the nation.”