The American Cable Association says the $4.6 billion deal will give Nexstar 115 Big Four affiliates in 101 markets and undue leverage in retrans negotiations. With the leverage, Nexstar would "drive up...fees (and, in turn, consumer prices) and...increase the risk and incidence of broadcast programming blackouts." As an alternative to denial, ACA suggests forcing Nexstar into "baseball-style arbitration" or preventing its use of "after-acquired station" clauses.
ACA To FCC: Deny Nexstar-Media Gen. Merger
Opening up a new front in its campaign to limit the retransmission consent fees MVPDs pay to broadcasters, the American Cable Association is asking the FCC to either deny Nexstar Broadcasting Group’s $4.6 billion acquisition of Media General or impose conditions on the deal.
The deal would give Nexstar undue leverage in retransmission consent negotiations, the trade group for small cable operators says in its petition.
With 115 Big Four affiliates in 101 markets, it says, Nexstar would use the leverage “to drive up…fees (and, in turn, consumer prices) and to increase the risk and incidence of broadcast programming blackouts.”
Nexstar has “after-acquired station” clauses in its retrans contracts that force MVPDs to automatically increase their payments for every TV home Nexstar newly acquires to the level Nexstar had previously set with the MVPDs, it says.
The petition also alleges that Nexstar and Media General have “repeatedly blacked out their programming…to the detriment of consumers” to gain leverage in negotiations. It cites two examples involving Nexstar and two involving Media General.
As an alternative to simply denying the merger, the petition suggests the FCC impose “baseball-style arbitration” on Nexstar when it reaches an impasse with MVPDs.
“During any arbitration, Nexstar would be prevented from blacking out its stations on the MVPD with which it is negotiating, with a true-up reflecting rates decided upon by the arbitrator dating back to the previous contract’s expiration date.”
It also suggests that the FCC prohibit Nexstar from exercising its “after-acquired station” rights.