FCC’s Heavy Hand With Nexstar And WPIX Is Misguided, Out-Of-Date

Harry Jessell

FCC Chair Jessica Rosenworcel is in a position to do much good for TV journalism, but she chooses to do harm.

On March 21, the agency fined Nexstar $1.2 million for exceeding the 39% national TV ownership cap by six points though its de facto control of WPIX New York. In addition to paying the fine, Nexstar must sell the station or a passel of stations in smaller markets to dip back under the cap.

I presume Nexstar will fight the fine and divestiture, and we can hope that it finds relief at the FCC or in the courts.

When Nexstar bought the Tribune group in 2019, it spun off WPIX and other stations to avoid any entanglements with the ownership restrictions that might hold up the $7.2 billion deal.

Two years later, with the approval of the FCC, Nexstar’s sidecar station group Mission Broadcasting bought the station from Scripps.

Like other sidecar groups and stations, Mission was created by Nexstar to circumvent the FCC ownership limits in 26 markets. Mission has separate ownership, but for all practical purposes, it functions as a subsidiary of Nexstar. Nexstar couldn’t buy WPIX without exceeding the national ownership cap, but its alter ego Mission could.

Such arrangements, in various forms, have grown in popularity over the past few decades with the blessing of the FCC. Today, they are deeply embedded in the fabric of the radio and TV businesses.

With this latest action, the FCC is now saying Nexstar’s control of Mission has gone too far, at least in New York. Based on its “investigation,” it says Nexstar, not Mission, is actively in charge of all WPIX’s programming, personnel and finances.

As I see it, if Nexstar is guilty of de facto control of WPIX, then the FCC is guilty of post de facto enforcement of its rules. It’s fundamentally unfair to OK the Mission-WPIX deal in 2020 and then come back two years later and declare the setup is an egregious violation of its rules.

When Mission bought WPIX, everybody — every person with an ownership interest in broadcasting, every FCC Media Bureau staffer, every communications attorney, every TV trade reporter — knew that Nexstar would be calling the shots.

Even FCC Commissioner Brendan Carr knew. “[I]t is concerning to me that the FCC cites as evidence of control those features of the relationship that the FCC previously signed off on,” he said in a brief statement. “We need to be careful that we do not undermine reasonable reliance on prior FCC decisions.”

For Rosenworcel to now say she is shocked, shocked at what is going on in the back room is disingenuous.

So, what is her purpose? We know that she doesn’t like station consolidation, either the de jure or the de facto kinds. I think the antipathy comes from having grown up in the Democratic party, which has always been wary of broadcasting even in its diminished state.

She started last year by blocking the big Tegna-Standard General merger and ended it by tightening up the ban against owning or operating two Big Four network affiliates in the same market. The latter move slammed into reverse nearly a half century of the FCC’s gradually easing the ownership limits.

She knows a big fine sends a signal to other broadcasters playing around the edges of the ownership rules.

Retransmission consent may also be a factor. Rosenworcel has been showing bias against broadcasting in its battle with cable over the fees, and keeping the lid on stations groups is one way of weakening their leverage in retrans negotiations.

The FCC just fined Nexstar $720,000 for alleged misbehavior in retrans negotiations with Hawaiian Telecom. And, oddly, it fined Mission $150,000 for its dealings over WPIX with Comcast even though it has determined that Mission delegated retrans duties along with everything else to Nexstar.

Let’s concede for the moment that the Nexstar really did overstep, that it went too far in usurping Mission’s authority. I would still argue that Rosenworcel penalty is excessive as it fails to consider the results of Nexstar’s micro-management of the station. By any meaningful measure, it has benefited not only New Yorkers, but also viewers across the country.

Nexstar has kept WPIX’s low-rated news going, even though New York is crowded with well-entrenched and capable rivals, including the Big Four O&Os and cable’s NY1.

WPIX is producing 10 hours of local news a day, not counting a local sports show each evening. I don’t know — and Rosenworcel doesn’t know — whether a new owner without the resources of the nation’s largest station group could sustain news at such a level.

The station also serves as a vital hub for Nexstar’s still fledgling NewsNation cable network. The economies from having major local and national news operations in one place help make both possible.

Aside from news, Nexstar needs WPIX as an anchor for The CW, which the group rescued from near extinction. You simply can’t have a broadcast network without a lock on the top three markets.

Local news! National news! A free broadcast sports and entertainment network! Rather than a regulatory noose, Rosenworcel should be hanging the FCC Medal of Broadcasting Excellence around Nexstar CEO Perry Sook’s neck.

When Nexstar challenges the fine, Rosenworcel needs to lighten up. I suggest the FCC reduce the penalty to a warning and extract a promise from Nexstar that it will put more distance between it and Mission in New York as well as the other 25 Mission markets.

Rosenworcel needs to get her head out of the FCC rulebook and theoretical notions of competition and diversity of voices and look at the real-world impact Nexstar and her misguided out-of-date attitudes are having on TV journalism.

Harry A. Jessell is editor at large of TVNewsCheck. He can be contacted here. You can read earlier columns here.