Nexstar, Tegna to merge in $6.2 billion deal

Nexstar Media Group has announced it will buy Tegna for $6.2 billion, a move that, if finalized, would combine two big names in broadcasting and potentially trigger more consolidation.

Once combined, the new company would boost Nexstar’s standing as the biggest owner of television stations in the U.S.

The deal is largely predicated on the significant changes to FCC television station ownership caps that are likely coming down. FCC commissioner Brendan Carr has cited those limits as outdated.

It’s not clear just how large the new Nexstar might be. The company already owns more than 200 stations, while Tegna has 64. 

There are multiple markets where Nexstar could end up controlling multiple stations, including some markets where there is the potential it could own or operate all big-three affiliates. It’s not clear if such an arrangement might be permitted or if the company could use a workaround such as selling off one or more stations in a particular market to Mission Broadcasting or another loosely-connected corporate entity.

Out of the big three networks, once Fox and The CW affiliations are considered, there are even more potential duopolies or triopolies. This also doesn’t include any further acquisitions or swaps Nexstar might explore once the dust settles on its merger.

The primary argument for broadcasters owning or controlling two or more stations in a market is that, with advertising revenue, once TV stations’ primary source of income, drying up, cost efficiencies are a must for them to continue to serve local communities. This often comes in the form of combining newsrooms, production teams or other departments, which typically results in significant job losses.

On the other side, some view consolidation as injecting a narrower scope of corporate control over stations.

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