Nexstar Completes $6.2 Billion Tegna Acquisition Amidst Legal Challenges
Nexstar Media Group has finalized its $6.2 billion acquisition of Tegna Inc., following regulatory approvals from the Department of Justice (DOJ) and the Federal Communications Commission (FCC) on Thursday. This transaction creates a broadcast company that will operate 265 television stations across 44 U.S. states and Washington, D.C., reaching an estimated 80% of American homes. The approval occurred amidst ongoing legal challenges from eight states and DirecTV, which were filed prior to and concurrently with the federal decisions.
The acquisition of Tegna by Nexstar, valued at $6.2 billion, concluded after receiving federal clearance.
Transaction Details and Regulatory Waivers
As a condition of the FCC's approval, Nexstar is required to divest six specific TV stations within two years. These stations include:
- KTVD in Denver, Colorado
- WTHR in Indianapolis, Indiana
- WCTX in New Haven, Connecticut
- WAVY in Portsmouth, Virginia
- WUPL in Slidell, Louisiana
- KNWA in Rogers, Arkansas
The FCC approved the merger by granting a waiver to the National Television Ownership Rule. This federal provision typically limits a single entity from owning television stations that collectively reach more than 39% of U.S. households. The combined assets of Nexstar and Tegna were projected to cover approximately 60% of U.S. households, necessitating this waiver. The Justice Department's antitrust division shortened its standard 30-day waiting period for the approval.
Statements in Support of the Merger
Nexstar founder and CEO Perry Sook stated that the transaction is essential for sustaining local journalism.
"The transaction is essential for sustaining local journalism and will result in a stronger enterprise with enhanced assets and capabilities, better positioned to deliver journalism and local programming."
FCC Chairman Brendan Carr stated that the agency's decision aligns with empowering broadcast TV stations to serve local communities. He emphasized the importance of local broadcast TV stations given shifts in the media landscape.
Carr added that waiving the ownership rule promotes competition, localism, and diversity.
He also noted that the approval "ensures broadcasters have the resources to continue investing in local news operations."
Former President Donald Trump had previously endorsed the merger, stating a need for more competition against what he described as "Fake News National TV Networks." He later urged the FCC to approve the deal via a social media post.
Opposition and Legal Challenges
A coalition of attorneys general from eight states—California, Colorado, Connecticut, Illinois, New York, North Carolina, Oregon, and Virginia—filed lawsuits prior to and on the day of the federal approval, aiming to block the merger. California Attorney General Rob Bonta led the lawsuit, which argued the merger would violate federal antitrust laws.
Opponents stated concerns that the consolidation could lead to:
- Price increases for consumers
- Reduced competition
- Job cuts
- Decreased diversity in news coverage
New York Attorney General Letitia James specifically cited concerns about competition in markets such as Buffalo and potential increases in consumer cable fees.
DirecTV also filed a lawsuit, alleging that the merger would significantly increase market power, enabling Nexstar to raise licensing fees charged to distributors, which could then be passed on to subscribers. Opponents also cited concerns regarding Nexstar's practice of consolidating newsrooms in communities where it owns multiple stations, potentially harming the local news industry. An earlier instance cited involved Nexstar's temporary suspension of late-night host Jimmy Kimmel on its ABC stations following comments he made, an action later reversed.
On Friday, following the federal approvals, the eight states filed an emergency motion to block the merger.
Internal FCC Dissent
FCC Commissioner Anna Gomez expressed concerns regarding the approval process.
She stated that the merger was approved without an open public process, a full Commission vote, or transparency for affected consumers and communities.
Gomez added that the merger concentrates broadcast power, potentially reducing independent editorial voices and prioritizing national business interests over local needs.
Future Outlook
Despite the ongoing lawsuits from the states and DirecTV, courts have historically been more inclined to block a deal from closing than to unwind one after its completion. Nexstar has commenced the integration of Tegna into its operations. Local TV operators are operating in a media landscape influenced by digital platforms and competing for viewers and advertising revenue.