IRVING, Texas—After receiving FCC approval earlier in the week, Nexstar announced on Sept. 19 that it has officially completed its acquisition of Tribune Media Company for $7.2 billion. In conjunction, Nexstar also announced it completed the divestitures of 21 TV stations for $1.33 billion to comply with federal regulations.

As a result of the merger, the combined Nexstar-Tribune becomes the largest U.S. broadcaster, owning or servicing 197 stations in 115 markets, which works out to reach 39% of U.S. TV households. Also as part of the acquisition, Nexstar took over as the owners of WGN America and received a 31.3% ownership stake in the Food Network.

Three former members of Tribune’s senior management have been appointed to new positions as part of Nexstar. Sean Compton is now the executive vice president of WGN America, WGN Radio and director of content acquisition. Dana Zimmer was named the executive vice president and chief distribution and strategy officer. Gary Weitman will take over the role as executive vice president and chief communications officer.

“The completion of our accretive acquisition of Tribune Media increases Nexstar’s geographic diversity and audience reach with national coverage and an expanded presence in top 50 DMAs, while offering complementary media assets and investments, scale driven synergies and further cash flow diversification,” said Perry Sook, Nexstar chairman and president.

“Today, the Nexstar team is comprised of more than 13,000 talented team members across America united by a common vision focused on localism, innovation and growth, as well as a passion for professional excellence.”

Sook says Nexstar will now produce more than 254,000 hours of local news, entertainment, sports, lifestyle and network programming.

WASHINGTON—A little more than nine months after the original announcement and subsequent divestiture of TV stations to meet necessary regulations, the FCC has approved the sale of Tribune Media Company broadcast stations to Nexstar Media Group Inc., as well as a group of station divestitures to bring the combined Nexstar-Tribune company under the 39% national reach barrier.

Originally announced in December 2018, Nexstar made a deal for Tribune’s 42 TV stations, WGN America and a 31% stake in the Food Network worth $6.4 billion. With this deal, Nexstar is set to become the largest broadcast group in the U.S. with 144 full-power TV stations in 115 markets.

Subsequent to acquiring Tribune’s stations, Nexstar was required to divest some of its stations to other groups like Scripps Broadcast Holdings, TEGNA Broadcast Holdings and CCB License. The FCC approved all of these divestitures as well, following in the footsteps of the Department of Justice’s decision in August.

This approval includes the potential issue of Nexstar acquiring two of the top-four ranked broadcast television stations in the Indianapolis market, while Scripps would do the same in the Norfolk-Portsmouth-Newport News market. The commission found that the Local Television Ownership Rule’s Top-Four Prohibition did not apply because of “pre-existing combinations” and “unique facts and circumstances of the stations and markets at issue,” the FCC’s official order reads.

Despite objections from groups like Common Cause, the FCC ultimately determined that the Nexstar-Tribune merger would provide a number of public interest benefits to its viewers. Among those cited by the commission were local stations having increased access to Nexstar’s D.C. news bureau and state new bureaus, and Nexstar’s commitment to invest savings from the merger into it stations, including investments in ATsc 3.0.

FCC Commissioner Michael O’Rielly called the approval of the Nexstar-Tribune merger “a win for viewers.”

“Today’s media landscape has created significant challenges for broadcasters, who are forced to compete against Silicon Valley behemoths for advertising dollars,” O’Rielly wrote. “Any opportunities to enable broadcasters to compete more effectively should therefore be encouraged and embraced.”

In a dissenting opinion, Commissioner Jessica Rosenworcel wrote that the FCC has a long-standing duty to ensure airwaves are consistent with the values of localism, competition and diversity. “While these may not be especially trendy, these principles have stood the test of time,” Rosenworcel wrote. “They support journalism and jobs. They make it possible for communities across the country to have local news and content, rather than just national news and programming developed on the coasts. Because we fall short of honoring these essential views in this decision, I dissent.”

In a short press release announcing the FCC’s approval of the merger, Nexstar anticipates that it will close the Tribune transaction and divestiture sales shortly.

The FCC’s full order of the Nexstar-Tribune merger is available here.

NEW YORK & IRVING, Texas—Nexstar and Fox Broadcasting Company won’t be dealing with any blackout issues as the two sides have agreed to renew their affiliation agreement for Fox network stations owned by Nexstar. While no financial details were shared, it is a multi-year agreement.

The agreement covers Nexstar stations in 31 markets that reach 8% of the U.S., per Nexstar, as well as eight Fox affiliates that Nexstar will be bringing in as part of its Tribune Media Company acquisition. When the Tribune deal is finalized, Nexstar reports that it will be the largest independent operator of Fox-affiliated stations, covering 16% of the U.S. and more than 17.5 million households.

“We are delighted to reach this long-term extension of our affiliation agreements with Fox well ahead of the expiration date of the existing contracts and in a manner that mutually recognizes the value of our partnership,” said Perry A. Sook, Nexstar Media Group founder, chairman, president and CEO.

Nexstar previously this summer struck a reaffiliation agreement with CBS, while it also experienced a blackout dispute with AT&T before coming to terms on a deal.

WASHINGTON—The Nexstar-Tribune merger is one step closer to completion following a green light signal from the Justice Department that it would approve the proposed $6.4 billion merger following the companies divestiture of a number of TV stations.

The Justice Department provided its conditional approval in a pair of documents—one a civil antitrust suit against the deal in the U.S. District Court of the District of Columbia, and the other a settlement between the three parties that if approved by the court would resolve the complaints alleged in the suit by the divestiture of the TV stations and related conditions.

DOJ argued that without the proposed divestitures, head-to-head competition in 13 television markets would be eliminated, allowing the combined Nexstar-Tribune to unfairly charge higher retransmission fees that could result in higher monthly bills for consumers, as well as higher prices for spot advertisements.

“Without the required divestitures, Nexstar’s merger with Tribune threatens significant competitive harm to cable and satellite TV subscribers and small businesses,” said Assistant Attorney General Makan Delrahim from the DOJ’s Antitrust Division. “I am pleased, however, that we have been able to reach a resolution of the Division’s concerns, thanks in part to the parties’ commitment to engage in good faith settlement talks from the outset of our investigation.”

As a result of the settlement, Nexstar and Tribune will be required to sell one or more stations currently owned by the companies in each of the 13 markets: Davenport, Iowa; Des Moines, Iowa; Ft. Smith, Ark.; Grand Rapids, Mich.; Harrisburg, Penn.; Hartford, Conn.; Huntsville, Ala.; Indianapolis; Memphis; Norfolk, Va.; Richmond, Va.; Salt Lake City; and Wilkes-Barre, Penn.

This settlement also resolves challenges raised by attorney generals in Illinois, Pennsylvania and Virginia.

Should the merger of Nexstar and Tribune be made official, Nexstar would become the largest broadcast group in the U.S.

The FCC must still complete its public interest review of the merger, which deals with more than antitrust issues.

WASHINGTON—The FCC's Media Bureau has accepted for filing the TV station spin-offs that Nexstar said gets its merger with Tribune--just barely--under the 39% national audience reach cap.

With that info in hand, the FCC's Media Bureau has set the comment dates for what is the now-consolidated application for transferring stations from Tribune to Nexstar, which combines the original application and the info on just what stations are being spun off, and to whom. Petitions to deny are due May 27; oppositions to those petitions are due June 11; replies are due June 18.

"Because this proceeding involves multiple transactions in multiple markets, and requires coordinated timing to effectuate divestures of certain stations that are necessary for approval of the overall transaction, we find that consolidated processing of the Divestiture Applications, and their incorporation into this docket, will result in administrative efficiency and ensure a comprehensive record in this proceeding," the Media Bureau said.

As part of the deal, Nexstar and Tribune officially told the FCC this week, in 10 markets where the deal would combine two of the top four stations, one of those will be sold to either Scripps (Justice has already signed off on those from an antitrust review perspective) or Tegna. In an eleventh market, Indianapolis, the merged company is asking to be allowed to retain Tribune's existing pair of top four stations.

Nexstar also has two stations in Indianapolis, but it was going to have to spin off at least two stations in the market regardless and has struck a deal to sell those to Circle City Broadcasting.

FCC rules presume combos of two of the top-four rated stations in a market are not in the public interest, but in a change instituted under FCC chair Ajit Pai, the FCC will look at exceptions on a case-by-case basis. So, for 10 of those combos, the combined company is not trying to make that case but instead divesting, but in Indianapolis, it will.

As to getting the deal under the 39% cap, Nexstar says those and the spin-offs to Circle City, will get it in just under the wire at 38.2965%.

Nexstar has been arguing, along with other broadcasters, that the national cap should be raised, but can't count on that happening, at least in time to factor it into the deal. 

WASHINGTON—Tribune Media shareholders may have overwhelmingly supported the company’s acquisition by Nexstar last week, but not everyone is happy about the potential merger. Common Cause—joined by Public Knowledge, United Church of Christ OC Inc. and Sports Fans Coalition—filed a petition on Monday with the FCC asking the commission to deny the proposed merger.

Nexstar first announced the proposed deal for Tribune in December 2018, acquiring 42 stations, cable network WGN America and a 31 percent stake in Food Network for a total transaction value of $6.4 billion. The combined assets would give Nexstar more than 200, pre-divestiture full power, owned or service TV stations in 118 markets, as well as growing digital operations. The company would reach a reported 39 percent of U.S. households, creating the largest local broadcasting company in the country.

The Common Cause petition says that Nexstar-Tribune’s reach would be closer to 72 percent, which exceeds the 39 percent Congressionally established ownership cap for VHF stations. Nexstar has said that it would divest some stations to comply with federal ownership rules.

“The Nexstar-Tribune merger is a bad deal for communities across the country who want local news from diverse and independent voices reporting on stories that impact their everyday lives,” read the statement from Michael Copps, Common Cause special adviser and former FCC commissioner. Copps makes the argument that the merger could lead to reporter layoffs and consolidated newsrooms, resulting in less in-depth reporting, locally-originated programming and local news. “This will only lead to less informed citizens, negatively impacting our democracy and civic dialogue.”

He continued: “At a time when the broadcast marketplace is already highly consolidated with a handful of conglomerates owning much of our local media, the FCC should block this merger and uphold a framework that gives communities diverse and independent sources of news and information.”

The full petition is available to read online.

WASHINGTON--The FCC, with an assist from a bunch of broadcasters including Sinclair and Tribune, have teamed up to tell a federal court that the groups challenging the FCC's return of the UHF discount did not have standing the bring the suit.

That came in comments to the U.S. Court of Appeals for the D.C. Circuit.

After judges in oral argument suggested Free Press et. al had not provided the requisite documentation of harmed members, the group supplied testimonials to that effect.

But in a brief filed with the court Wednesday (May 16) in response to Free Press' supplement, the FCC said that the Supreme Court had long made clear that for an organization to establish standing, it must identify specific members "who had suffered cognizable, traceable, and redressable injuries," and that the court's signal that it would allow Free Press to provide that after the fact if Free Press could show that it "reasonably, but mistakenly, believed" its original filing "had sufficiently demonstrated standing."

The FCC said the petitioners had not done that. For one, it said, since petitioners did not identify any specific members, let alone what their injury might be, it "could not have reasonably thought it had demonstrated standing."

The FCC pointed out it had challenged standing, as had the broadcasters, Free Press et al. had failed to remedy that deficiency in reply briefs or oral argument.

And trying to use Free Press' supplement against it, the FCC said that its "belated submission of hundreds of pages of declarations, following a court order, demonstrates it was unreasonable for petitioners to have previously believed their standing was obvious."

As to Free Press' citation of the potential harms of a Sinclair-Tribune merger in their supplement, the FCC said that was simply "speculation about the effects of proposed broadcast acquisitions that are still awaiting Commission action." To be fair, Free Press also cited the impact of Sinclair-Bonten deal, which was approved last year.

Given that Free Press did not establish standing "at the time of the suit," or so the FCC argues, the court should dismiss the petition to review and reverse the UHF discount decision on the basis of lack of standing.

In their brief, Sinclair, Tribune, Fox, Univision, Trinity, ION and Nexstar, second-chaired the FCC's argument, summing it up this way:

"The Supreme Court and this Court long ago held that parties relying on the associational-standing doctrine must 'establis[h] that at least one identified member' has standing. It is likewise well-established that petitioners 'must produce actual evidence, not mere allegations, of facts that support [their] standing.' Petitioners failed to meet these clear requirements and had no reasonable basis for believing that the requirements did not apply."

They also agreed that the Sinclair-Tribune deal is "insufficiently certain or imminent to establish standing."

The insufficiently imminent point is because the FCC has yet to even restart its shot clock on the deal, after which it will put the latest deal out for several weeks of public comment before rendering a decision.

They also point out that the Bonten deal was not opposed by Free Press et al. "Petitioners cannot establish standing based on a transaction they did not oppose and cannot seek to undo because any alleged harm to Petitioners would be traceable to that transaction, not the FCC’s separate Reconsideration Order," they said. "Additionally, the FCC had not approved the Sinclair-Bonten transaction when Petitioners instituted this action, the “critical time for Article III standing analysis.” 

WASHINGTON—As a result of potential amendments being made to the proposed Sinclair-Tribune merger, the FCC has announced it is pausing its review of the deal. This comes after an ex parte note from Sinclair to the FCC that said the company was evaluating divestitures and other amendments based on changes to the FCC’s media ownership rules, as well as the impact of the DOJ review.

Read the full story on TVT’s sister publication B&C. 

WASHINGTON—The Federal Communications Commission has opened a docket on Sinclair’s $3.9 billion acquisition of Tribune Media. On June 27, the commission accepted Sinclair’s applications for transferring control of the Tribune broadcast assets comprising 80 individual licenses covering some 42 TV stations, plus translators and six radio stations, including WGN-AM in Chicago, where Tribune is based.

“Sinclair would acquire Tribune through a merger of a newly formed subsidiary of Sinclair with and into Tribune, immediately followed by Tribune merging with and into Sinclair’s wholly owned subsidiary, Sinclair Television Group, Inc., with STG as the surviving company. As a result, Tribune’s licensee subsidiaries would become indirect subsidiaries of Sinclair,” the Public Notice announcing the opening of the docket stated.

The docket number is 17-179. Petitions to deny the merger are due Aug. 7, 2017. Opposition filings are due Aug. 22, 2017. Replies are due Aug. 29, 2017.

Sinclair and Tribune both own full-power stations in several markets. In 10 such “overlap” markets, FCC rules prohibit Sinclair from owning both its own and the Trib stations. In another overlap market—Milwaukee—Sinclair owns holds a duopoly comprising WCGV and WVTV, while Tribune holds a license for WITI in the same market. However, since Sinclair sold WCGV in the incentive auction, it is seeking a waiver to allow common ownership until WCGV is powered down.

In yet another overlap market, Tribune owns two stations, but Sinclair cannot acquire both because of the “top-four” local media ownership rule prohibiting ownership of more than two of four stations with the greatest market share in a given market.

The merger will create a permissible duopoly in another market where both Trib and Sinclair own single stations, and in two more, Sinclair will acquire existing Tribune duops.

The deal also would give Sinclair four radio stations in Seattle and two in Chicago.

The proposed transaction would result in Sinclair exceeding the national 39 percent audience reach cap by 6.5 percent, inclusive of the UHF discount that counts only half of the audience for a UHF license toward the total.

According to the Public Notice, Sinclair and Tribune say they will “will take such actions to the extent required to comply with the terms of the merger agreement and the national television ownership limit—including the UHF discount—in order to obtain FCC approval of the transaction. To the extent that there are changes, or proposed changes, to the national television ownership limit, the applicants may file amendments to the applications to address such changes.”

Sinclair also seeks to continue satellite waivers in two markets and failing station waivers in two markets.

BALTIMORE & CHICAGO—News started buzzing over the weekend that Sinclair was nearing a deal to acquire Tribune Media, and now that news has been confirmed. Sinclair Broadcast Group will acquire 100 percent of Tribune Media Company for $3.9 billion, plus the assumption of $2.7 billion in net debt, according to a press release from Tribune.

Tribune’s 42 television stations across 33 markets will now fall under the Sinclair banner, as well as cable network WGN America, digital multicast network Antenna TV and a minority stake in the TV Food Network. Sinclair will also pick up Tribune assets not involved in the broadcast industry.

Under the terms of the agreement, Tribune stockholders will receive $35 in cash and 0.23 shares of Sinclair Class A common stock for each share of Tribune Class A common stock and Class B common stock they own.

“This is a transformational acquisition for Sinclair that will open up a myriad of opportunities for the company,” said Chris Ripley, president and CEO of Sinclair. “The Tribune stations are highly complementary to Sinclair’s existing footprint and will create a leading nationwide media platform that includes our country’s largest markets. The acquisition will enable Sinclair to build ATSC 3.0 (Next Generation Broadcast Platform) advanced services, scale emerging networks and national sales, and integrate content vehicles. The acquisition will also create substantial synergistic value through operating efficiencies, revenue streams, programming strategies and digital platforms.”

Sinclair may sell certain stations in markets where it currently owns stations to comply with FCC ownership requirements and antitrust regulations; these determinations will be determined during the regulatory approval process.

The deal has been unanimously approved by the Boards of Directors for both companies and is expected to close in the fourth quarter of 2017.

NEW YORK—Tribune Media announced that it anticipates receiving approximately $190 million in pre-tax proceeds from the Federal Communication Commission’s recently completed reverse auction for broadcast spectrum.

Tribune indicated that the commission accepted one more if its bids or those of its channel-sharing partners: “ The anticipated proceeds reflect the FCC’s acceptance of one or more bids placed by Tribune Media or channel share partners of television stations owned or operated by Tribune Media during the auction to modify and/or surrender spectrum used by certain of such bidder’s television stations.” Tribune said it did not expect any “material change in operations” as a result of the spectrum sale.

Both Gray and Fox TV announced expected proceeds of $91 million and $350 million respectively, and both indicated there would be “material change in operations,” with Gray going so far as saying there would be no job cuts. Tribune, however, is the first among sellers to mention channel sharing, although presents the most likely scenario for selling spectrum without materially affecting operations.

Tribune owns and/or operates 42 TV stations reaching 50 million TV households. The company said it expects proceeds in the second half of 2017.

See more TV Technology coverage at our spectrum auction silo.

CHICAGO—Tribune Media Co. today announced that Peter Liguori, the company’s president and chief executive officer since January 2013, has decided to step down following the company’s 2016 fourth quarter and full-year earnings release, expected to occur during the first week of March. Mr. Liguori will also resign from the company’s board of directors at that time. Tribune Media’s board of directors will conduct a search working with Korn Ferry to identify a new CEO.

“Following the successful completion of several financial, strategic and creative initiatives, culminating in the pending sale of Gracenote, Tribune Media is well advanced in its transformation to a more focused broadcast and cable networks company,” said Liguori. “I believe that now is the ideal time for a new leader to steer today’s Tribune. As curious and excited as I am about pursuing new opportunities, I am equally grateful for the achievements, commitment and integrity of this company’s management team and its dedicated employees.”

Bruce Karsh, chairman of Tribune Media’s board of directors added, “We greatly appreciate Peter’s leadership in the transformation of Tribune Media over the last four years, including the efforts to monetize non-core assets and simplify the company. It became clear to Peter and the board that in this last year of his contract it was time to find a new CEO to run the more broadcast-centric company.”

During the last four years, Liguori led the restructuring and transformation of Tribune Media. In 2013, the company acquired Local TV for $2.7 billion, which added 19 local television stations, bringing the total Tribune Media local television station portfolio to 42. In 2014, the company spun off its newspaper publishing division to its shareholders. During this period, Liguori led the company’s strategic investments in WGN America and grew its brand and distribution to nearly 80 million households.

In February 2016, Tribune Media announced a process to review its strategic and financial alternatives, resulting in the sale of certain real estate assets for more than $500 million and the pending sale of the company’s Gracenote metadata business to Nielsen for approximately $560 million.

The board of directors has chosen one of the company’s current directors, Peter M. Kern, to serve as the interim chief executive officer during the search process. Mr. Kern has more than 25 years of experience as an executive, investor and M&A advisor in the media industry.

Tribune owns portfolio of television and digital properties driven by quality news, entertainment and sports programming. Tribune Media is comprised of Tribune Broadcasting’s 42 owned or operated local television stations reaching more than 50 million households. 

CHICAGO—The ongoing blackout between Tribune and Dish could soon effect the upcoming NFL season, at least for one market. Tribune has begun to run commercials warning its customers in the Indianapolis market that the blackout will impact their ability to watch Indianapolis Colts games during the upcoming 2016-2017 season unless they switch pay-TV providers. Currently both CBS and FOX affiliates in Indianapolis are blacked out by Dish, and without them Colts fans on Dish could miss up to 17 of the Colts 21 games (including preseason), per Tribune.

To read the full story, check out TVT’s sister publication B&C.