Nexstar and Tegna Want Waivers of National Cap, Local Ownership Rules
Nexstar and Tegna want the FCC to waive the nationwide TV station ownership cap, along with local ownership limits in 23 markets, if those rules remain in effect when the agency decides on the companies' $6.2 billion merger, said transfer of control applications submitted Tuesday.
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The FCC’s consideration of the proposed transaction “should not be skewed by false narratives whose foundation relies on wishful thinking about yesteryear” but “based in reality -- Nexstar and TEGNA must combine if their local stations’ critical role in our nation’s information ecosystem is to be preserved,” said the filings. After consummation, Nexstar would control 265 stations reaching 80% of U.S. households, the company has said.
Under the FCC’s current UHF discount rule, the reach of the new Nexstar would be calculated at 54.5% of U.S. households, still far above the cap of 39%. The agency has an open proceeding on all of its local broadcast rules and a separate one on the cap, which could lead to their elimination. But if they’re not when the deal is under review, the FCC “should waive the National Cap to the extent needed to facilitate” the benefits of the deal, the filings said.
“Depriving Nexstar of the ability to maintain and grow its local news and other programming undermines viewpoint diversity just as much as it undermines localism by increasing the likelihood that local broadcast stations will be replaced by automated and filtered non-local content provided by Big Tech,” the filings argued. “Approval of the Transaction is essential as the very existence of these local television companies is threatened by accelerating predation from their unhandicapped competitors.”
The FCC’s authority to waive or alter the cap has been disputed by opponents of the deal, but Chairman Brendan Carr reiterated Tuesday that he believes the agency does have that power (see 2511180049).
The broadcasters need waivers of the local TV ownership rule in 23 markets where Nexstar would end up owning more than two stations, including Washington, D.C., Houston, Des Moines and Memphis. The company would own three stations in most of those markets, but it would control four in New Orleans; Hartford-New Haven, Connecticut; and Fort Smith, Arkansas. In an additional 17 markets, Nexstar would own two stations, which is allowed under the current rules. The deal would also lead to numerous markets where the new Nexstar would control two or more top-four stations, but those arrangements won’t require additional waivers after the 8th U.S. Circuit Court of Appeals struck down the FCC’s top-four prohibition.
The FCC should waive the local TV ownership rule “to allow Nexstar to achieve the efficiencies and economies of scale necessary to adapt to the rapidly evolving video distribution and advertising marketplace and to preserve and expand one of the last remaining sources of trusted news and information,” the applications said.
Waiving the rules will make the new company more competitive with tech and streaming companies and allow it to devote resources to journalism and ATSC 3.0, the filings added. The combined company would develop “strong local stations that are responsive to the needs of their communities” and support them with “the regional and national programming and journalistic resources that can only come with enhanced scale.”
Public Knowledge Legal Director John Bergmayer told us that he expects the deal to face significant pushback and disagreed that it would lead to improved local journalism. “The only way strong local journalism really happens is stations run locally, not distant corporations sending prepackaged news,” he said, calling the proposed deal “clearly illegal.”