Nexstar received FCC consent Wednesday to proceed with its plan to acquire Media General (MG) in a $4.6 billion transaction that will make the combined entity the third largest owner of local television broadcast stations in the U.S. Announced in January 2016, the proposed union of Irving, Texas-based Nextstar and Richmond, Virginia-based MG would leave the merged entity (known as Nextstar Media Group) in control of 171 stations in 100 markets.
The FCC’s action dovetails with Justice Department (DOJ) approval of the deal last September, subject to the parties’ compliance with conditions requiring the divestiture of seven television stations in six markets. In conditioning approval on these divestitures, the DOJ concluded that the transaction as originally structured “would have given Nextstar the power to impose higher prices on local and national advertisers, and to demand higher retransmission fees from cable and satellite companies” in the markets in question. Fulfilling the DOJ’s condition, Nexstar sought FCC consent to sell TV station holdings in the requisite designated market areas (DMAs). The parties also agreed to divest station assets in other DMAs in order to bring the transaction into compliance with the FCC’s 39% cap on national audience reach.
Citing the parties’ adherence to the DOJ conditions, and highlighting potential benefits which include the establishment of state news bureaus and expanded access by Nextstar viewers to the MG news bureau in Washington, D.C., the FCC concluded that the public interest would be served by a grant of the transaction. The FCC also dismissed claims presented by Cox Communications, the American Cable Association and several other petitioners that the transaction would concentrate too much market power in the hands of Nexstar, declaring that, because “no substantial and material question of fact had been raised . . . there is no apparent reason for the Commission to step in.” While voicing appreciation for the FCC commissioners’ work in approving the transaction, Nexstar President Perry Sook promised that “Nexstar will continue its initiatives across the combined entity to deliver superior, unique local content and services to viewers and businesses in each of the communities it serves.”