FCC chair Ajit Pai has circulated an item approving the merger of Nexstar and Tribune for a vote by the other commissioners, according to the FCC's Web site (the order) and an FCC official familiar with the item (that it OK's the deal). Approval would create the country's largest local TV broadcast station ownership group.
Pai is expected to have two other, Republican, votes for the meld.
Broadcasters have argued they need to heavy up to keep up with more lightly regulated MVPD and over-the-top video delivery powerhouses. Pai has often pointed to the wealth of competition and broadcast regs dating from an earlier era in justifying broadcast deregulatory moves meant to allow them to own more stations.
Nexstar had told investors and the SEC it expected the deal to close by the end of this month. The Justice Department signed off on the deal July 31, conditioned on station spin-offs and the official said the FCC decision tracked with that.
The spin-off markets are Davenport, Iowa; Des Moines, Iowa; Ft. Smith, Arkansas; Grand Rapids, Mich.; Harrisburg, Pa.; Hartford, Conn.; Huntsville, Ala.; Indianapolis, Ind.; Memphis, Tenn.; Norfolk, Va.; Richmond, Va.; Salt Lake City, Utah; and Wilkes-Barre, Pa.
On Nov. 30 of last year, Nexstar struck a deal to buy Tribune stations for $7.1 billion. The merger has been approved by both boards.
The Tribune stations became available after the FCC designated Sinclair's attempt to buy them for hearing by an FCC judge, citing concerns about whether Sinclair had misrepresented the deal to the FCC.
Justice, in announcing its settlement with the companies, praised their "commitment to engage in good faith settlement talks from the outset of our investigation," a departure from the contentious time it said it had with Sinclair.
Per that settlement, Nexstar-Tribune is spinning off TV stations in 13 markets, a requirement that Justice based in part on its assertion that without those, the combined company "would likely charge cable and satellite companies higher retransmission consent fees to carry the combined company’s broadcast stations, resulting in higher monthly cable and satellite bills for millions of Americans," as well as higher spot prices in the divestiture markets.
Nexstar and Tribune had already told the FCC it would be spinning off stations in most of those markets anyway, but in Indianapolis it had asked to be allowed to retain Tribune's existing pair of top four stations, which is no longer the case.
"If, as expected, the Republican majority at the FCC green-lights this transaction, we can expect more reporter layoffs, closed or consolidated newsrooms, less deep-dive investigative reporting, and many fewer locally-originated programs. That’s the history of mergers," said former FCC Chairman and Common Cause advisor Michael Copps. "In short, more news deserts."
"Nexstar has executed on an ambitious playbook to become the nation's largest local TV station owner," said Adonis Hoffman, chairman of consulting firm Business in the Public Interest and a former top FCC staffer, of the almost certain approval. "It will need that scale to withstand challenges from Big Tech, OTT and other non-broadcast competitors with deeper pockets and fewer regulatory limits."
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