Newsmax Pushes FCC to Block Nexstar-TEGNA Deal

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Newsmax Challenges Nexstar’s $6 Billion Takeover of TEGNA

Newsmax has submitted a formal comment to the Federal Communications Commission (FCC) urging the agency to reject Nexstar’s proposed $6 billion acquisition of TEGNA. This move comes after months of informal discussions and concerns raised by Newsmax and its founder-CEO, Christopher Ruddy, who argues that the FCC does not have the legal authority to remove certain broadcast ownership rules.

The current FCC regulations limit the reach of any single broadcast company to no more than 39 percent of the American viewing audience through direct ownership of local TV stations. This restriction is designed to promote media diversity and prevent monopolistic practices in the broadcasting industry.

Nexstar, however, has sought to bypass these rules by requesting the FCC to either eliminate the ownership limitations or grant waivers for each market where TEGNA operates. The company believes that such changes would facilitate smoother integration and expansion of its media portfolio.

In its recent petition to deny the transaction, Newsmax and Ruddy expressed concerns that the merger could lead to higher retransmission consent fees from cable and satellite companies. They argue that Nexstar could leverage its local TV stations as bargaining chips during contract negotiations, a tactic it has already employed in recent years.

This issue becomes even more pressing if Nexstar begins demanding higher fees for NewsNation, a cable news channel that competes directly with Newsmax for space on cable and satellite line-ups. Recent distribution agreements involving Nexstar have required the carriage of NewsNation alongside its local CW Network stations and affiliates of ABC, CBS, Fox, and NBC.

“Newsmax, its millions of viewers, and Americans of every political persuasion, demographic, and location would be harmed if the Commission approves the Nexstar acquisition of TEGNA,” Newsmax and Ruddy wrote. “The transaction will further concentrate distribution and set the stage for a domino of additional similar transactions.”

Newsmax has voiced similar concerns about distribution agreements involving other cable news channels. Last year, the company filed a federal lawsuit against Fox Corporation over the distribution of Fox News Media-owned networks. Newsmax claimed that Fox’s practice of bundling its news channels with local TV stations and sports networks violated antitrust law. Although an initial lawsuit was dismissed on procedural grounds, Newsmax refiled the case in another venue. Fox has since requested the dismissal of the second complaint.

The situation involving Nexstar highlights a rare scenario where two broadcasters, both favored by the Trump administration, are on opposing sides of a business transaction. For nearly a year, Nexstar has lobbied members of the Trump administration, including FCC Chairman Brendan Carr, to relax federal ownership rules. These changes would reduce regulatory hurdles for major media companies seeking to expand through consolidation.

Several weeks ago, Nexstar’s Board of Directors approved an extension of its founder and CEO Perry Sook’s employment contract, with part of the decision based on Sook’s desire to acquire TEGNA.

Ruddy remains a vocal opponent of mass media transactions. He asserts that the FCC lacks the legal authority to completely eliminate broadcast ownership limitations, as Congress explicitly tasked the agency with enforcing them.

President Donald Trump has previously expressed opposition to eliminating these rules if it allows major networks like NBC and ABC to consolidate their operations. However, he has not publicly addressed the potential impact on local TV station owners or whether he supports efforts to empower them while maintaining limitations on major networks.