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.
House Assistant Democratic Leader Joe Neguse and Sen. Michael Bennet, both D-Colo., are urging FCC Chairman Brendan Carr to reject Nexstar’s proposed $6.2 billion purchase of Tegna (see 2508190042) because it will violate the current 39% national broadcast-ownership cap and “could have devastating consequences for” their state. Nexstar CEO Perry Sook said in September that he expected the FCC to act on the cap before year-end to allow the Tegna purchase to proceed (see 2509050058).
More consolidation among local broadcast stations is a must for survival, but beyond a change in ownership, it will also bring a change in how stations operate, station group owners said Wednesday at NAB’s annual New York City show. They also said the ATSC 3.0 transition needs a deadline for exiting 1.0 that the FCC will support.
The FCC’s draft further NPRM on ATSC 3.0 is seen by broadcasters as an indication of Chairman Brendan Carr’s good intentions toward the industry, but 3.0 opponents said the item highlights concerns about encryption, privacy and spectrum use.
A draft further NPRM proposing the relaxation of some FCC requirements for broadband labels is expected to be approved at the agency’s Oct. 28 meeting, but it isn’t yet clear how Commissioner Anna Gomez will vote on it.
As the FCC looks at revising or doing away with its dual network and local TV rules, MVPDs told us they're likely to object along familiar lines about broadcaster consolidation tipping the balance of power in retransmission consent negotiations. FCC commissioners unanimously approved a 2022 quadrennial review NPRM in September that asks whether the local TV and dual network rules remain necessary (see 2509300062).