FCC Approves Nexstar’s $4.6B Acquisition Of Media General
by David Lieberman
Nexstar Broadcasting has the all-clear for its $4.6 billion acquisition of Media General after the FCC said this morning that it approved the deal — waiving a ban on transactions while the agency conducts an auction of broadcasters’ airwave spectrum.
The companies overcame Justice Department objections in September when they agreed to divest seven stations. Nexstar currently owns or operates stations in 62 markets, while Media General is in 48. With the divestitures, the combined company will reach 38.9% of U.S. households, just barely under the national ceiling of 39%.
“Upon closing the transaction Nexstar will continue its initiatives across the combined entity to deliver superior, unique local content and services to viewers and businesses in each of the communities it serves,” CEO Perry Sook says.
Regulators rejected objections raised by Cox Communications, Dish Network, the American Cable association, the Communications Workers of America, Free Press and other consumer groups.
The distributors said that the merger would give Nexstar too much market power, especially to set prices in retransmission consent negotiations. Others said that the companies hadn’t demonstrated that the deal would benefit the public.
But regulators said that “no substantial and material question of fact has been raised” about whether the union would hurt the public.
Regarding retransmission negotiations, “there is no apparent reason for the Commission to step in” without “evidence of anticompetitive practices or other wrongdoing not apparent here,” the order says.
And they determined that a merger could serve the public.
For example Nexstar said it would be “economically feasible as a result of the merger” to create news bureaus in Albany, NY; Austin, TX; and Nashville, TN. It promised to “examine the viability” of creating state news bureaus in Alabama, Indiana, Pennsylvania, and Virginia.
In addition, “Nexstar would have stations in 20 of the top 50 markets to support the Washington DC news bureau, and all of its 171 stations…would benefit from topical Washington DC coverage,” the FCC order says.
Nexstar shares are up 5.5% in mid-day trading while Media General is up 2.9%.