Congress hasn’t given the FCC any authority over the national TV ownership cap, said the American Television Alliance in a letter filed in docket 17-318 Monday. Congress set the cap at 39% and explicitly removed the new cap from the Commission’s quadrennial review process, ATVA said. “When Congress directs agency action -- whether through codification in a statute or through a direction to change a rule --the agency cannot undo that action unless Congress has authorized it to do so.” The U.S. Supreme Court ruling striking down Chevron deference made it clear that “congressional silence is no longer an invitation for regulatory discretion,” the filing said. ATVA said broadcaster arguments that the FCC has authority over the cap are undercut by its filings from 2013, when the FCC was examining doing away with the UHF discount. “Broadcasters say it is obvious that the FCC has broad authority to raise the national cap because Congress failed to ‘enshrine’ it in the statute” but also said it was “obvious that the Commission did not have any authority to change the cap when broadcasters thought the FCC might lower it,” ATVA said.
A recent social media post from President Donald Trump condemning proposals to lift the national TV ownership cap doesn’t definitively spell disaster for broadcasters, said New Street analyst Blair Levin in a note to subscribers Tuesday. Trump’s post was focused on preventing ABC and NBC from growing (see 2511240055), but that isn’t a likely consequence of lifting the cap, Levin wrote. “One should not assume that the President understands what he is talking about when it comes to this post, or that it is a deeply held point of view, as it relates to law and process.”
A social media post by President Donald Trump on Sunday condemning proposals to do away with the national cap on TV station ownership drew a flurry of responses Monday from NAB, Nexstar CEO Perry Sook and Newsmax CEO Chris Ruddy, who wants the cap to remain in place. FCC Chairman Brendan Carr has been widely seen as likely to do away with the cap, but he has also been clear about his deference to Trump. “If this would also allow the Radical Left Networks to ‘enlarge,’ I would not be happy,” Trump said in a Truth Social post. “ABC & NBC, in particular, are a disaster - A VIRTUAL ARM OF THE DEMOCRAT PARTY. They should be viewed as an illegal campaign to the Radical Left. NO EXPANSION OF THE FAKE NEWS NETWORKS. If anything, make them SMALLER! President DJT.”
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.
The FCC doesn’t have the authority to do away with the national broadcast-ownership cap or waive it on a case-by-case basis, said Vanderbilt Law School professor Brian Fitzpatrick in a Nov. 3 letter posted Tuesday in docket 17-318. Fitzpatrick’s filing was amplified in a news release from Newsmax, which has opposed eliminating the cap. "Congress forced the Commission to adopt the 39% ownership cap in the 2004 amendments to the Telecommunications Act and further commanded that any entity that grew beyond that number must divest in a timely manner,” wrote Fitzpatrick. “The Commission cannot ‘waive’ these statutory commands. Nor can it circumvent them by manipulating the UHF discount or permitting sidecar deals.”
Nexstar and Tegna have filed transfer of control applications with the FCC to begin the regulatory review of their proposed $6.2 billion deal, Nexstar said in a news release Tuesday. The deal would put Nexstar over the national TV ownership cap, and the applications include requests for waivers of the cap and other FCC ownership rules, the release said. “The applications address why, if certain of the FCC's rules governing television ownership remain in effect, waiver of the rules would serve the public interest, especially in the local communities Nexstar's stations will serve.” The FCC's authority to waive the cap was disputed in a recent ex parte filing (see 2511180049)
Sinclair has purchased an 8.2% stake in E.W. Scripps as part of an effort to buy the entire company, Sinclair told the SEC in a filing Monday.
Sinclair has purchased 8.2% of E.W. Scripps as part of an effort to purchase the company, Sinclair told the SEC in a filing Monday. Sinclair’s board of directors and management team ”have engaged in constructive discussions” with Scripps “for several months regarding a potential combination of the two companies,” the filing said. In a news release issued after Sinclair’s filing, Scripps said its board “will take all steps appropriate to protect the company and the company’s shareholders from the opportunistic actions of Sinclair or anyone else” but also said it “will continue to evaluate any transactions and other alternatives that would enhance the value of the company.” Sinclair’s SEC filing says it bought 6,275,204 shares of E.W. Scripps. On Friday afternoon, Scripps share price was $3.06, suggesting Sinclair’s outlay was roughly $20 million. On Monday morning, the share price had risen to $3.65. A person familiar with the deal said Sinclair purchased the stock to put cash on the line and move negotiations with Scripps forward. In the SEC filing, Sinclair said combining with Scripps would provide “the ability to compete successfully for advertising share, critical programming, and distribution economics through enhanced local and national scale, coupled with disciplined execution of synergies.” The stock trade doesn’t require Sinclair to file with the FCC, but a full purchase of Scripps would put Sinclair over the current national ownership cap, and so require either waivers or the elimination of the cap. Nexstar’s proposed purchase of Tegna is already in a similar situation. Sinclair told the SEC that “upon reaching a definitive agreement, a transaction could be completed within nine to 12 months.”
The broadcast industry is ripe for consolidation and could eventually resolve into just two groups, each the size of the combined Nexstar/Tegna, suggested TV group CEOs from Nexstar and Sinclair on their respective Q3 earnings calls this week. “This level of consolidation would strengthen the industry's financial footing and position broadcasters as more capable competitors to big media and big tech” while preserving news coverage, said Sinclair CEO Chris Ripley Wednesday. “I think a good, strong industry needs to have good, strong companies comprising it,” said Nexstar CEO Perry Sook Thursday. “We can't do it all by ourselves.”
FCC Chairman Brendan Carr said Tuesday that he hasn’t made up his mind about how the FCC should handle the national ownership cap or the 2022 quadrennial review, and no application has yet been submitted for the Nexstar/Tegna deal. Carr has said in the past that the FCC has authority to alter the national cap and that broadcasters should no longer be constrained by ownership limits. During Tuesday's news conference, he also said he doubts the FCC will rule on Nexstar/Tegna in 2025, and the shutdown would likely affect the agency’s timeline for addressing the national cap and the QR.