FCC Approves Nexstar-Tribune Merger

The FCC, by a partisan 3-2 vote, today approved the $6.4 billion sale of Tribune Media broadcast stations to Nexstar Media Group. In connection with this transaction, the commission also approved the divestiture to E.W. Scripps and Tegna of stations in 13 markets necessary for Nexstar to come into compliance with the commission’s local and national television ownership rules.

In the Indianapolis and Norfolk markets, the commission found that the transfer of preexisting combinations of two top-four ranked broadcast television stations to Nexstar and Scripps, respectively, would be in the public interest.

Once the deal closes, Nexstar will, by most measures, be the largest station group in the nation with 197 stations in 115 markets covering 63% of TV homes and combined 2019 revenue of $4.4 billion. It will have stations in Chicago, Los Angeles and other major markets for the first time and will be the No. 1 affiliate of ABC, CBS, NBC, Fox and CW.

The FCC said it found that the proposed merger would provide several public interest benefits to viewers of current Tribune and Nexstar stations. For example, viewers would benefit from their local stations having increased access to Nexstar’s Washington news bureau and state news bureaus.

Additionally, Nexstar demonstrated that it would invest savings resulting from the merger into its stations, including investments in ATSC 3.0, the next-generation television broadcast standard.

In July the Department of Justice cleared the deal, and the FCC approval represents the final required regulatory approval needed to close the transaction. As such, Nexstar said it anticipates closing the Tribune transaction and the divestiture sales shortly, at which time the company will host a conference call, webcast and investor presentation and update the market on its synergy targets and free cash flow guidance.

In casting his vote for the merger, Commissioner Michael O’Rielly said it was clearly a win for viewers. “Nexstar has a history of increasing news content on the stations it acquires, especially by providing stations access to its state and local public affairs resources,” he said in a statement. “I expect it will do the same here, consistent with commitments made in the transfer applications.  Further, Nexstar has been a lead proponent of ATSC 3.0 and plans to increase investment to upgrade the purchased properties to ATSC 3.0 capabilities. This should not be overlooked, given the potential consumer benefits.”

Democrats Jessica Rosenworcel and Geoffrey Starks voted against the merger, saying it was enabled by a “loophole” — the out-of-date UHF discount to the national ownership cap — and that it denied opponents to the deal an opportunity to be fully heard.

Also displeased by the approval was Public Knowledge. Charlotte Slaiman, the group’s senior policy counsel, said in a statement: “High-quality local news is incredibly important to our society and democracy. In particular, state and local governments are greatly improved by the sunshine of local reporting. The changing marketplace for news and information has made it more and more difficult for independent local news organizations to survive.

“Congress and the FCC determined years ago that television broadcasting is an especially important industry in which to have a diversity of outlets. Going further than the antitrust laws require, Congress gave the FCC the public interest standard and ownership caps for television broadcasters. Yet today, the important priority of localism in news was ignored, to the detriment of all of us, not only in our role as consumers but also as participants in our democracy.”

An order detailing the FCC’s reasoning can be found here.