Nexstar has announced the completion of its acquisition of Tegna following important approvals from the Federal Communications Commission (FCC) and the Justice Department. The merger, valued at $6.2 billion, is expected to create a significant broadcasting powerhouse, although it faced opposition from various distributors and legal challenges from multiple state attorneys general.
Perry Sook, Nexstar’s CEO, emphasized the acquisition’s importance for bolstering local journalism, asserting that combining the strengths of both companies would enable Nexstar to deliver enhanced journalism and local programming. The transaction entails the ownership or operation of nearly 260 stations nationwide, surpassing the FCC’s ownership cap, which typically restricts companies from owning stations that cover more than 39% of the U.S. population. To facilitate the merger, the FCC granted Nexstar a waiver allowing this expansion, as well as permission to own more than two stations in overlapping markets.
FCC Chairman Brendan Carr heralded the deal as a necessary evolution for local broadcast stations, counteracting the decline of community newspapers and promoting local news coverage. He noted the merger would ultimately result in Nexstar owning less than 15% of U.S. TV stations, positioning it as a competitive force in the media landscape.
However, critics express concerns that the merger could diminish localism rather than enhance it, suggesting that operational efficiencies might reduce the diversity of news and content at individual stations. An antitrust lawsuit was filed by California and several other states, arguing that the merger would grant the combined entity excessive leverage over retransmission fees, which could be passed onto consumers. DirecTV also initiated legal action against the merger, sparking speculation that additional states and firms may follow suit.
California Attorney General Rob Bonta has pledged to actively oppose the merger, stating, “Nexstar/Tegna is not a done deal. California will not let the parties merge without a fight.” Advocacy organizations like America’s Communications Association voiced strong support for the lawsuits, cautioning that smaller cable operators, particularly in rural areas, would be disproportionately affected.
Challenges regarding the ownership cap have emerged, with opponents contending that only Congress holds the authority to grant such waivers. Carr, defending the FCC’s decision, indicated the agency is operating within legal boundaries as determined by previous court rulings.
Democratic FCC Commissioner Anna Gomez criticized the expedited approval process, arguing that major transactions of this nature should undergo thorough scrutiny by the full Commission. She pointed out that Nexstar has already made staff cuts at its existing stations, raising alarms about potential layoffs and the negative implication for local newsrooms nationwide.
Despite the criticisms, Nexstar welcomed the merger’s approval after aggressive lobbying efforts. The company is expected to divest six stations within two years as part of the agreement, including stations in Denver, Indianapolis, New Haven, Portsmouth, Slidell, and Rogers.
As a condition of the approval, Nexstar also committed to increasing the amount of local news coverage in the markets it acquires. Moreover, it agreed to extend existing retransmission agreements with cable and satellite distributors at current rates through November 30.
The FCC’s Media Bureau maintains that the merger would enable local stations to enhance their investments in community news, allowing them to better compete in an evolving media landscape against major national players. This transaction has the potential to reshape the future of local broadcasting and journalism in America, a development that observers on all sides will continue to monitor closely.
