The $6.2 billion merger of Nexstar and Tegna, a game-changing deal poised to reshape the media business, has been on the lips of many NAB Show attendees this week. But a panel Monday afternoon with three FCC officials asked to explain the commission’s review of the transaction yielded few answers.
Even though the FCC and Department of Justice antitrust division both approved the transaction and Nexstar declared it to be closed, paying off Tegna and its shareholders, a lawsuit by DirecTV on antitrust ground has gained sudden traction. A federal judge last Friday issued a preliminary injunction blocking the deal. Nexstar has vowed to appeal the case to the Ninth Circuit federal appellate court.
At the NAB panel, moderator Larry Walke, associate general counsel for the broadcast lobbying group, asked a string of questions about the events of the past several weeks. He asked whether the FCC’s action established a template for future mergers. He also wondered if the FCC actually has the authority to make changes to the ownership cap and then OK a deal under rules it has changed. The cap is part of a Congressional act, and FCC commissioner Anna Gomez and many other stakeholders have argued that the FCC should not be permitted to do it.
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“That’s an active proceeding, and I’m not going to really comment on the substance of it,” replied David Brown, Division Chief of the FCC’s Video Division. “I’m OK with the question, but I think that from a bureau perspective, you can look at the Nexstar-Tegna merger order, we discuss legal authority there. I think that’s an accurate statement of where the bureau is. I’m not going to speak for the chairman or what ultimately will come out.”
FCC Chairman Brendan Carr, a dogged Donald Trump loyalist who has repeatedly called for eliminating the cap, is not at this year’s NAB Show. For decades, the confab has been a setting where the heads of the FCC and the DOJ’s antitrust division share the stage with the head of the NAB to hold bipartisan discussions of industry matters. This year, amid amped-up rhetoric by Carr about a range of issues, including the federal equal-time provision, broadcast license renewals and other topics, those conversations have gone by the wayside.
Deputy Bureau Chiefs Evan Morris and Alexander Sanjenis followed Brown’s lead and mentioned multiple times their inability to speak on Carr’s behalf. They did weigh in on recent FCC inquiries into sports shifting from broadcast to streaming, ATSC 3.0 and other topics, and the tenor of the conversation was convivial, reflecting Washington’s cozy regulatory circles. Still, recent criticism voiced by Sen. Ted Cruz (R-TX) and others of the FCC for having its Media Bureau write an order approving the Nexstar-Tegna transaction as opposed to putting the deal to a commission vote, did seem germane after the hour-and-20-minute NAB session.
Before the FCC officials took the stage, Acting Deputy Assistant Attorney General Charlie Beller delivered prepared remarks about the media regulation landscape. He didn’t mention the Nexstar-Tegna transaction or any specific deal, opting instead to stay in the conceptual zone.
The DOJ’s antitrust division was criticized by U.S. District Judge Troy Nunley in the lawsuit by DirecTV for not being more vocal in raising what the judge deemed to be clear antitrust issues in the deal. The combination would create a station giant roughly double the size of any previous one, with the decades-old rule limiting a single owner’s control of stations to 39% of U.S. households essentially going out the window. In a prior local TV mega-deal, Nexstar’s acquisition of Tribune Media in 2019, during Trump’s first term, DOJ weighed in forcefully, requiring the company to divest of a number of stations.
Without alluding specifically to Nexstar-Tegna, Beller articulated the DOJ’s view of the broadcast sector, which has been cited in favorable opinions about the merger. “Broadcast companies are competing in a world with more distribution options than ever before,” he said. At the same time, he continued, “broadcast is neither insulated from competition nor relevant to it”