UPDATED with California AG comment: Nexstar said Thursday that it had closed its acquisition of Tegna following approvals from the FCC and the Justice Department.
The $6.2 billion merger, which will create a broadcast station giant, was given the greenlight by the FCC’s Media Bureau, clearing a hurdle amid opposition from some distributors and a legal challenge from state attorneys general.
Perry Sook, the CEO of Nexstar, said in a statement, “This transaction is essential to sustaining strong local journalism in the communities we serve. By bringing these two outstanding companies together, Nexstar will be a stronger, more dynamic enterprise—better positioned to deliver exceptional journalism and local programming with enhanced assets, capabilities, and talent.”
The agency also granted Nexstar a waiver from an ownership cap, which limits companies from amassing stations covering more than 39% of the country. The combined company will own or operate almost 260 stations across the country, well surpassing the limit, with earlier estimates at around 80%.
The FCC also granted a waiver to allow Nexstar to own more than two stations in a market. According to the agency, the company had overlap with Tegna in almost three dozen markets.
In a statement, FCC chairman Brendan Carr said, “The FCC has been focused on empowering broadcast TV stations to serve their local communities, consistent with their public interest obligations. Today’s agency decision does exactly that as both the record and Nexstar’s enforceable commitments demonstrate. For too long, the FCC stood by while newspapers closed by the dozen in communities all across the country. Those trusted sources of local news and information shuttered while the FCC dithered. If you care about local news, you should care about the future of local broadcast TV stations.” He said that with the merger, Nexstar will own less than 15% of the TV stations in the U.S.
But critics say that the transaction will have the opposite effect of boosting localism, and instead create a new broadcast giant that will streamline operations across its portfolio, leading to less specialized news and other content at individual stations.
California, New York and six other states filed an antitrust lawsuit late Wednesday to block the merger, warning that the combined company will have leverage to extract more retransmission-consent fees from distributors that ultimately will get passed on to consumers. DirecTV also filed its own suit earlier on Thursday, and there is some expectation that more states and companies will join the litigation.
Following the FCC and DOJ approval, California Attorney General Rob Bonta’s office released a statement saying, “Nexstar/Tegna is not a done deal. California will not let the parties merge without a fight.”
Some groups, like America’s Communications Association, representing smaller- and medium-sized distributors, weighed in support of the lawsuits.
“This further skewing of the marketplace will hit smaller cable operators and their largely rural customer base the hardest,” said Grant Spellmeyer, president and CEO of the association.
There’s also the question of the ownership cap, as some opponents of the merger have argued that only Congress, not the FCC itself, can grant a waiver or lift it.
In his statement, Carr argued that the agency was on solid legal footing in letting the merger go forward. He said that the D.C. Circuit “has already determined that the relevant media ownership regulation is an agency rule, not a firm statutory limit, and the full Commission has reached the same determination on multiple occasions. Waiving that rule here is consistent with longstanding FCC authorities and doing so promotes the underlying purpose of the FCC’s media regulations by promoting competition, localism, and diversity.”
Anna Gomez, the sole Democrat on the FCC, bashed the decision to approve the merger, noting that it was done without a full agency vote, something she had called for in recent months.
“A transaction of this magnitude, which includes new and novel issues before the FCC, demands open deliberation before the full Commission, not a quiet sign-off meant to avoid public scrutiny,” she said. “Given the increasingly alarming pace of reckless media consolidation, the American public deserves to know how and why this decision was made.”
She also warned that the merger would shrink newsrooms, as Nexstar already has made cuts at stations it owns in cities like Chicago and Los Angeles. Among those who were cut in L.A. were longtime TV figures like weatherman Mark Kriski and anchors Lu Parker and Glen Walker at KTLA-TV.
“The consequences of this rubber stamp approval will be felt in living rooms and newsrooms across the country, resulting in fewer voices, less competition, and higher costs for consumers,” Gomez said.
The merger approval is not a surprise: Last month, President Donald Trump endorsed the transaction and Carr quickly responded, “Let’s get it done.”
Nexstar’s Sook thanked Trump, along with Carr and the DOJ, for the merger’s approval. The company had lobbied aggressively to secure approval for the transaction, while urging the agency to relax its ownership rules permanently.
The FCC said that, as conditions of approval, Nexstar has agreed to sell six stations within the next two years. They are KTVD-TV in Denver; WTHR-TV in Indianapolis; WCTX-TV in New Haven, CT; WAVY-TV in Portsmouth, VA; WUPL-TV in Slidell, LA; and KNWA-TV in Rogers, AR.
The FCC also said that Nexstar has committed to increasing the amount of local news in provides in acquired markets, and the company also has agreed to offer cable and satellite distributors an extension of their retransmission agreements at the existing rates through November 30.
The FCC Media Bureau said that the transaction allows “the relevant local broadcast TV stations to continue and in fact expand their investments in local news. It does so by allowing them to compete more effectively in the modern media marketplace. And it does so by allowing them to counteract the growing imbalance of power between those local broadcast TV stations on the one hand and the powerful Big Four national programmers on the other—namely, Comcast, Disney, Paramount, and Fox.”