Nexstar CEO Perry Sook Jason Koerner/Getty Images The local TV giant Nexstar closed its $6.2 billion takeover of rival Tegna on Thursday, creating a TV station behemoth after the Department of Justice and FCC signed off on the mega-deal.
“This transaction is essential to sustaining strong local journalism in the communities we serve,” Nexstar founder and CEO Perry Sook said in a statement. “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. We are grateful to President Trump, Chairman Carr, and the DOJ for recognizing the dynamic forces shaping the media landscape and enabling this transaction to move forward.”
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Under the approval, Nexstar must divest within two years from TV stations in Denver, Colorado (KTVD); Indianapolis, Indiana (WTHR); New Haven, Connecticut (WCTX); Portsmouth, Virgnia (WAVY), Slidell, Louisiana (WUPL); and Rogers, Arkansas (KNWA).
The greenlight comes a day after a lawsuit was filed by eight states, led by California Attorney General Rob Bonta, challenging the deal. The merger had been opposed by a variety of companies and groups: From DirecTV and Newsmax to the Communications Workers of America.
Still, with federal approval, the deal was allowed to close, and now Nexstar will be able to take advantage of the combined scale.
Under federal law, the TV station ownership cap is limited to 39 percent of homes per company. The combined company will now reach roughly 80 percent of American homes, by owning 265 TV stations across 44 states and Washington, D.C.
“The FCC has been focused on empowering broadcast TV stations to serve their local communities, consistent with their public interest obligations,” FCC Chairman Brendan Carr said in a statement. “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,” he added. “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. Often, they are the ones in a market doing the gumshoe reporting that citizens value and need. By approving this transaction, which allows Nexstar to own less than 15% of television stations, the FCC acts mindful of the media marketplace that exits today—not the one from decades past—and the agency ensures that these broadcasters have the resources to continue investing in their local news operations.”
In their lawsuit, the states led by Democratic lawmakers argue that the merger would give the combined company too much control over local TV in violation of antitrust laws. The tie-up would allow it to raise prices, cut jobs and lead to less diversity in news coverage, they claim.
DirecTV, which retransmits local TV broadcasts, also sued on Thursday to block the proposed deal. It alleges that the merger will lead to an “enormous increase in market power,” enabling Nexstar to raise license fees. In this scenario, DirecTV says it may have to pass those costs onto its subscribers.
With the greenlight, Nexstar will begin integrating Tegna into its operations. Although the lawsuits from the states and DirecTV pose a threat, courts have historically been more open to stopping a deal rather than unwinding one.
To approve the deal, the FCC gave Nexstar a waiver exempting it from the rule barring a single company from owning too many TV stations.
“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,” Carr said in a statement.
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