Key Points
- Newsmax urged the FCC to block Nexstar’s proposed $6 billion acquisition of TEGNA in a formal petition to deny.
- The company warned the deal would increase retransmission fees and further concentrate power among local TV station owners.
- The filing highlights growing divisions among conservative-aligned media companies over broadcast consolidation rules.
Newsmax has filed a formal comment with the Federal Communications Commission (FCC) that urges the agency to reject Nexstar’s proposed $6 billion takeover of peer broadcaster TEGNA.
The document, filed with the regulator on December 31 and made public on Friday, comes after months of informal commentary by Newsmax and its founder-CEO Christopher Ruddy, who claims the FCC lacks the legal authority to eliminate certain broadcast ownership rules.
Specific to the Nexstar-TEGNA proposal, the FCC’s current rules limit the reach of any one broadcast company to no more than 39 percent of the American viewing audience through their direct ownership of local TV stations.
Nexstar has urged the FCC to approve the matter by eliminating its ownership limitation or by granting it waivers to existing rules in each of the markets where TEGNA owns a local TV station.
In its petition to deny this week, Newsmax and Ruddy said the transaction would allow Nexstar to demand higher retransmission consent fees from cable and satellite companies by using its local TV stations as bargaining chips during contract negotiations with those service providers — something it has already done over the past few years.
Those concerns grow if Nexstar starts demanding higher fees for NewsNation, a cable news channel that competes with Newsmax for space on cable and satellite line-ups and for distribution fees from pay TV providers. Nexstar’s recent distribution deals with cable, satellite and streaming providers have required carriage of NewsNation in addition to its local CW Network stations and ABC, CBS, Fox and NBC affiliates.
“Newsmax, its millions of viewers, and Americans of every political persuasion, demographic, and location would be harmed if the Commission approves the Nexstar acquisition of TEGNA,” Newsmax and Ruddy wrote. “The transaction will further concentrate distribution and set the stage for a domino of additional similar transactions.”
Newsmax has expressed similar concerns about distribution agreements involving other programmers of cable news channels. Last year, Newsmax filed a federal lawsuit against Fox Corporation over distribution of Fox News Media-owned cable networks, saying the broadcaster’s practice of coupling its news channels with local TV stations and sports networks violates antitrust law. An initial lawsuit filed by Newsmax against Fox was dismissed on procedural grounds, but the company re-filed the same lawsuit in another venue weeks later. Fox has asked for the second complaint to be dismissed.
The situation involving Nexstar sets up a rare situation where two broadcasters that have curried favor with the Trump administration are on opposite, competing ends of a business transaction.
For nearly a year, Nexstar has lobbied members of the Trump administration, including FCC Chairman Brendan Carr, for a loosening of federal ownership rules that would largely eliminate regulatory hurdles and headaches for major media companies who want to grow larger through consolidation.
Several weeks ago, Nexstar’s Board of Directors approved an extension of its founder and current CEO Perry Sook’s employment contract, with the green-lightly partially based on Sook’s desire to acquire TEGNA.
Ruddy is a vocal opponent of mass media transactions. He claims the FCC lacks the legal authority to eliminate broadcast ownership limitations entirely, because Congress explicitly tasked the agency with implementing them.
For his part, President Donald Trump has expressed opposition to eliminating those same rules if it allows broadcast networks like NBC and ABC to consolidate their operations. Trump has not weighed in on the effect it might have on local TV station owners, or whether he supports efforts that would empower local broadcasters while keeping limitations in place for major networks.
More Stories
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- Newsmax CEO: FCC lacks authority to eliminate broadcast ownership cap
- Newsmax tries to sue Fox News again, this time in Wisconsin
- Broadcast TV stocks dip after Trump opines about ownership rules
- Nexstar CEO says Trump, Congress favor broadcast deregulation
