Nexstar says it closes TEGNA acquisition, despite lawsuits

BLANK KXTV TEGNA TD — The television studio of TEGNA-owned ABC affiliate KXTV in Sacramento. (Photo via Google Street View)

Key Points

Nexstar said it closed its $6 billion acquisition of TEGNA after receiving approval from the FCC and DOJ.
The deal includes divesting six stations to address regulatory concerns over market reach limits.
The acquisition still faces federal lawsuits that could challenge the transaction’s long-term viability.

Nexstar Media Group on Thursday said it closed on its $6 billion acquisition of peer broadcaster TEGNA, despite two federal lawsuits that were recently filed meant to prevent the transaction from moving forward.

The announcement came minutes after the Federal Communications Commission (FCC) and the U.S. Department of Justice (DOJ) signed off on the deal, according to a press release issued by the company.

Executives from both companies previously told investors that the deal was expected to close in the second half of the year; as of two weeks ago, Nexstar was working with Bank of America and other financial institutions to secure a loan to bankroll part of their effort.

“This transaction is essential to sustaining strong local journalism in the communities we serve,” Nexstar CEO Perry Sook said in a statement on Thursday. “By bringing these two outstanding companies together, Nexstar will be a stronger, more dynamic enterprise — better positioned to deliver exceptional journalism and local programming with enhanced assets, capabilities, and talent.”

Sook praised FCC Chairman Brendan Carr and President Donald Trump for their support while the transaction was awaiting federal regulatory approvals.

Despite Nexstar’s assertion that the deal has closed, it isn’t clear whether it will hold up over the long term. The company is facing two federal lawsuits — one filed by attorneys general from seven states and the Commonwealth of Virginia, and a separate but related one filed by DIRECTV — that were meant to prevent Nexstar and TEGNA from moving forward on the transaction.

The deal also violates a federal law that prohibits one broadcaster from owning TV stations that reach more than 39 percent of the American viewing audience. The Nexstar-TEGNA arrangement exceeds that statutory limit, but the FCC said it had the authority to grant waivers to those ownership rules and did so here.

The FCC approval came late Thursday evening, hours after DIRECTV’s lawsuit was made public. The agency says Nexstar has agreed to divest six stations in order to satisfy regulatory concerns, including:

KTVD (Channel 20) in Denver
KNWA (Channel 51) in Rogers, Arkansas
WAVY (Channel 10, NBC) in Portsmouth, Virginia
WCTX (Channel 59) in Hartford, Connecticut
WTHR (Channel 13, NBC) in Indianapolis
WUPL (Channel 54) in New Orleans

Numerous organizations, including DIRECTV, filed briefs with the FCC opposing the transaction while it was being scrutinized. On Thursday, the FCC dismissed nearly all of their concerns, including arguments that the combined companies would reduce local news programming.

“Nexstar has a track record of maintaining and expanding local news following its acquisition of other stations,” the FCC wrote in its order on Thursday, finding that Nexstar’s acquisition of Tribune Media in 2019 led to an increase of 28,000 hours of news coverage in the years since.

The opponents also said that the transaction would lead to Nexstar demanding more money from cable and satellite platforms for their stations, but the FCC said rising cable bills were not their concern.

“We do not believe that an increase in retransmission consent rates, by itself, is necessarily a public interest harm,” the FCC wrote.