Newsmax is preparing to sue the Federal Communications Commission (FCC) over a recent vote to eliminate a long-standing rule that limits the number of broadcast television stations a company may own, the cable network’s chief executive confirmed on Tuesday.
In a wide-ranging phone interview with The Desk Tuesday afternoon, Newsmax CEO Christopher Ruddy said he is prepared to follow through an earlier threat to litigate the matter once the FCC’s vote is codified next month.
FCC Chairman Brendan Carr supported the elimination of the cap, which restrained broadcasters from having direct ownership of licensed local TV stations that reach 39 percent of the American viewing audience. Carr said the elimination of the rule was intended to help broadcasters better compete in the era of streaming services and allow them to maintain investments in local news programming.
The FCC voted along party lines, with Carr and Commissioner Olivia Trusty, both Republicans, supporting its revocation. Anna Gomez, the agency’s only Democrat, opposed it. The agency has been operating with two vacant seats for more than a year.
“It’s a blatant violation of federal law,” Ruddy said in response to the vote. “Congress set the cap. It didn’t want the FCC to set the cap. Almost every FCC chairman has agreed with that.”
Ruddy said Carr appeared to support maintaining the limitation through previous acts as a commissioner, and noted former Chairman Ajit Pai also worked to preserve the broadcast ownership cap in prior administrations.
“Why why does suddenly that the FCC have omnipotent powers under Brendan Carr?” Ruddy questioned. “It doesn’t make any sense, other than you want to circumvent Congressional law.”
Ruddy said Carr appeared to be fulfilling the wish list of major broadcast TV station ownership groups like Nexstar Media Group, who owns NewsNation, a cable channel that competes with Newsmax for viewers and advertising dollars. He previously expressed concerns that allowing Nexstar to grow their media empire would allow the broadcaster to squeeze higher fees from cable and satellite providers, which could constrain budgets to the point that pay TV platforms might not offer a space to Newsmax.
“The broadcast industry hated this cap,” Ruddy complained. They know they stand to make literally billions of dollars in additional (retransmission consent) fees as soon as they get this consolidation, and so they’ve been salivating to do it. They know they don’t have the support in Congress to do it. They haven’t been able to do it in over 20 years, so they spent a lot of money in the swamp lobbying millions of dollars to get a willing FCC to go try to attempt to circumvent the law, and they got that man in in Brendan Carr.”
Newsmax Media, the parent company of Newsmax, is one of several plaintiffs involved in an ongoing legal challenge over the FCC’s decision to sign off on Nexstar’s $6.2 billion acquisition of TEGNA earlier this year. Attorneys for the FCC said that litigation is premature because Carr and other commissioners have not yet endorsed the deal, despite the FCC’s Media Bureau doing so in March. The matter has not been brought to a full vote, and the lawsuit is now on hold until the FCC acts on it. (The case is separate from an antitrust lawsuit brought in California.)
Ruddy says Newsmax is readying a similar lawsuit focused specifically on the FCC’s recent vote on the ownership cap, but must wait at least 30 days for the vote to be codified in the Federal Register. He said eliminating broadcast ownership rules is not endorsed by mainstream conservatives and has no bipartisan support.
“The broadcast industry and television is known as being opposing Republicans, opposing conservatives; why is this the top priority of the Trump administration?” Ruddy asked. “The president never campaigned on it; it was never a MAGA talking point. In fact, he once said the opposite — that he wanted less consolidation.”
Ruddy declined to say whether he’s spoken with President Donald Trump about the issue, but said Trump is “certainly aware of our viewpoint on it.” He downplayed concerns that Newsmax’s position on the broadcast ownership rule were not aligned with Trump’s. In the past, the president has criticized the idea of broadcast networks growing larger, but endorsed efforts by Nexstar and other local TV station owners to consolidate.
Ruddy was more critical of Carr, whom he characterized as a poor public servant who is out of touch with the wants and desires of mainstream conservatives.
“I think Brendan Carr has not been very good for President Trump and the administration (and) certainly not good for conservatives,” Ruddy said.
Carr did not return a text message seeking comment on Tuesday.
