The top official at the Federal Communications Commission (FCC) met earlier this month with several industry stakeholders and the owner of a Detroit-area television station who is trying to sell his outlet to a Nexstar Media Group-controlled company.
The meeting, held on January 18, involved FCC Chairperson Jessica Rosenworcel, WADL (Channel 38) owner Kevin Adell and two public interest groups — the American Television Alliance (ATVA) and NCTA the Internet and Television Association (NCTA) — and was the latest to be held concerning Adell’s pending sale of WADL to Mission Broadcasting.
For months, the ATVA and the NCTA have argued against the deal, filing briefs with the FCC that accused Nexstar of attempting to circumvent federal ownership caps by bankrolling Mission’s purchase of WADL.
Nexstar operates all of Mission’s television stations under shared services agreements, which allow Nexstar to hire employees, sell advertising inventory and negotiate carriage of Mission-licensed stations with cable and satellite operators. The ATVA and NCTA say Mission is nothing more than a shell company that helps Nexstar avoid regulations meant to limit the number of broadcast TV stations one company may own.
Last year, Adell and Mission re-worked their purchase agreement to include a stipulation that Mission would preserve WADL’s “must carry” status with cable and satellite operators. Stations that invoke must carry with cable and satellite operators cannot request fees in exchange for the rights to distribute their programming to subscribers.
In conversation with The Desk, Adell said the sale of WADL to Mission would generate a sizable return on their long-term financial investment in the station. Adell has the backing of several minority groups, including Rev. Jesse Jackson’s Rainbow Push Coalition and the Detroit-area chapter of the NAACP, which have lobbied in favor of the deal.
Representatives from the Rainbow Push Coalition and Detroit-area minority organizations participated in the January 18 meeting with the ATVA and the NCTA, according to documents reviewed by The Desk. Rosenworcel attended the meeting with her legal advisor, David Strickland, and the FCC’s Media Bureau Chief Holly Saurer, the documents revealed.
At the meeting, the ATVA and NCTA reaffirmed their concern that any sale of WADL to Mission would do more harm than good. They said Adell’s agreement with Mission to preserve the station’s must carry status would expire in 2026, at which point Nexstar could demand whatever price it wanted for distribution of the station on cable and satellite platforms.
The groups also suggested Nexstar may try to pull a legal fast one on the FCC and the pay television, saying the affirmation of WADL’s must carry status does not “eliminate the possibility that, if this transaction is approved, [Nexstar and Mission] will later argue that after-acquisition station clauses in Nexstar’s retransmission agreements, rather than WADL’s must-carry election, would control and bring carriage of WADL under those agreements at Nexstar’s rates.”
That would be concerning, the groups say, because Nexstar has been aggressive in its retransmission consent negotiations with cable and satellite companies in recent years, demanding more money for the rights to redistribute its local TV stations and cable news outlet NewsNation. Last year, DirecTV pulled Nexstar’s channels from its satellite and streaming services, saying the proposed fee increases were unjustified.
Fees associated with carriage of WADL are likely to increase at some point, too, because Nexstar intended to affiliate WADL with its CW Network once the deal between Mission and Adell closed.
The affiliation move was necessitated by a business decision at Paramount Global, which operated the CW Network as a joint venture with Warner Bros Discovery until late 2022, when the companies sold a 75 percent stake in the CW Network to Nexstar. A few months later, Paramount said it would drop CW Network programming from eight of its television stations, including one in Detroit.
The announcement left Nexstar scrambling to find a new home for CW Network programming in Detroit and seven other cities. With Nexstar bumping up against the federal government’s ownership cap, it agreed to bankroll Mission’s acquisition of WADL with the intention of moving the CW affiliation to the station by the end of the year, according to two sources familiar with the matter.
That strategy was confirmed by Adell in numerous phone interviews with The Desk over the past two months. He agreed to distribute CW Network shows through WADL on a temporary basis, but stopped broadcasting CW Network shows in early November after Nexstar declined to pay him a distribution fee.
Two weeks later, Nexstar said it was moving its CW Network programming to WMYD (Channel 20), an independent station owned by the E. W. Scripps Company. Adell threatened to sue Scripps for “tortious interference,” The Desk reported, though no legal case has been filed.
Meanwhile, the agreement between Mission and Adell remains in place, with the FCC being the only element that is keeping the deal from being fully consummated.
