The Federal Communications Tax hit Nexstar Media Group and its corporate associate Mission Broadcasting with a whopping $1.2 million and an order to bring WPIX-TV New York or other stations back into compliance with ownership limits. long-time station.
The commission on Thursday released a 42-page decision in its investigation into Nexstar’s ties to Mission Broadcasting and whether the business deal violated the FCC’s limit on TV station ownership. The commission concluded that Nexstar’s near-total oversight of WPIX’s operations provided the station with highly effective management of valuable TV real estate assets – a full-power TV broadcast station in the nation’s largest market. The commission fined the Mission $612,395 for its participation in the exercise.
The regulatory dispute stems from Nexstar’s $4.1 billion acquisition of Tribune Media in 2019. The deal made Nexstar Media Group the largest owner of TV stations in the country, with nearly 200. Tribune’s 42 stations included stalwart retailers in the country’s three main TV markets: WPIX-TV New York, KTLA-TV Los Angeles and WGN-TV Chicago. But the deal put Nexstar well above the FCC’s rule that no entity can own stations that reach more than 39% of U.S. TV households. Nexstar had to divest more than 20 stations to stay under the station cap. WPIX was among the stations sold, in part because the New York market alone represents 6.5% of the entire U.S. TV universe. WPIX’s promotion to Mission in 2020 allowed Nexstar to keep more stations under its roof. With WPIX’s 6.5% gain added to Nexstar’s current portfolio, the company’s total U.S. presence is about 45%, the commission said.
The detailed report states that the working agreement between Nexstar and Mission is a thinly veiled strategy to bypass fee tenure caps and other rules.
The FCC gave Nexstar and Mission two options for addressing the breach within 12 months: sell WPIX to an unaffiliated third party or sell enough Nexstar stations to keep the company consistent with the 39% threshold.
“Nexstar and Mission must take one of two options within twelve months after the issuance of any forfeiture order or cost of forfeiture proposed in this (Notice of Apparent Liability), whichever occurs first, in which case both (1) Mission disposes of the WPIX to an unrelated third party, or (2) the Mission formally sells WPIX to Nexstar and Events files a request for payment authorization for the license project, with Nexstar divesting a sufficient number of other stations to reduce its footprint of national protection in accordance with the national possession limit.
Perry Sook, president and CEO of Nexstar, defended the company’s behavior and promised to influence the fee decision.
“We are extremely dissatisfied with the current Federal Communications Tax decision regarding our relationship with WPIX-TV and we intend to vigorously contest it,” said the Nexstar founder. “We believe the FCC was misled by the habitually disturbing noise in the media ecosphere and grossly misjudged the data. The information is that Nexstar has always complied with FCC rules and that its relationship with WPIX-TV under a Native Advertising Settlement (LMA) was authorized by the FCC in 2020 when WPIX-TV was purchased by Mission Broadcasting, Inc. believes that joint working, shared service and local marketing agreements such as those through which it is engaged are vital to address an aggressive media market and to enable broadcasters to continue investing in local news, investigative journalism and other services that they are uniquely present in the communities through which they are positioned.”
The FCC’s decision on WPIX is another sign of the Biden administration’s industrious line on mergers and acquisitions and media and technology regulation. This comes at a time of greater rigidity for native broadcasters and the entire conventional TV landscape that is struggling with the business transition to digital. DirecTV, which fought Nexstar in recent retransmission consent pricing negotiations, was quick to applaud the FCC’s decision. Nexstar’s presence in New York makes the company a more formidable negotiating partner with national MVPDs like DirecTV.
“We applaud the FCC’s efforts to implement media ownership rules into the relationships Nexstar has with ancillary players like Mission Broadcasting,” DirecTV said in a press release.
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