Nexstar’s recent merger has raised eyebrows and sparked legal challenges following a notable jump in its market reach. Before the merger, the company held a UHF discount that placed its audience reach at 39 percent; however, post-merger, this figure has soared to 54.5 percent. The Federal Communications Commission (FCC) recently indicated its willingness to waive existing broadcast regulations. In its merger-approval order, the Media Bureau asserted that a case-by-case waiver approach allows for wary scrutiny of transactions that might enhance public interest, particularly through bolstered investments in local news programming.
Moreover, in a related move, the FCC agreed to waive its Local Television Ownership Rule. This decision enables Nexstar to consolidate ownership of more than two full-power TV stations across 23 specified market areas, albeit with the stipulation of six station divestitures in cities including Denver, Indianapolis, and New Haven.
However, this merger has not gone unchallenged. A coalition of state attorneys general representing California, Colorado, Connecticut, Illinois, New York, North Carolina, Oregon, and Virginia initiated a lawsuit aimed at blocking the merger. They argue that the merger would consolidate an overwhelming amount of broadcast programming under a single entity, thereby reducing local control and job opportunities while significantly altering the landscape of news delivery nationwide. The legal team from California’s Attorney General’s Office expressed concerns that this merger would ultimately decrease the quality and diversity of media content available to consumers.
In their legal action, the attorneys general have sought a temporary restraining order from a federal judge in California. This order aims to prevent Nexstar and Tegna from merging their assets and requires Nexstar to maintain the Tegna assets separately until further review.
Historically, the cap on national audience reach has come under scrutiny, particularly after Congress raised the limit from 35 percent to 39 percent in a 2004 amendment to the Telecommunications Act of 1996. This amendment also stipulates that the FCC cannot forbear on regulatory enforcement against entities surpassing the 39 percent threshold, a point that opposition groups have emphasized in their arguments against the merger. These opponents contend that only Congress has the authority to uplift this cap, asserting concerns that the current regulatory framework inadequately addresses changing dynamics in media ownership and broadcasting practices.
