When Donald Trump endorsed Nexstar‘s proposed merger with Tegna, which would create a broadcast giant reaching 80% of the country, it scrambled a feverish Washington, D.C. lobbying effort over a transaction that has gotten fewer headlines than Netflix-Paramount-Warner Bros.
The merger will have a huge impact, giving Nexstar 265 stations in 44 states and the District of Columbia, and likely remaking the media landscape.
On Tuesday, the Senate Commerce Committee took up an issue that is underlying that deal: A restriction that prevents any TV broadcast entity from amassing stations that cover more than 39% of the country. Nexstar is seeking a waiver from the FCC from the 39% cap, while the agency is considering whether to raise that threshold or abolish it altogether.
At stake is the future of local broadcast TV and, more specifically, local news, something lawmakers of both parties repeatedly cited.
The hearing wasn’t to focus on the merger itself, but on whether the broadcast ownership limits still make sense as viewers have migrated to streaming and tech giants like Meta and Google have siphoned off local ad markets. Nexstar and other major station groups say they need greater scale to compete and still have the capital to finance local programming.
One of the witnesses was Chris Ruddy, the CEO of conservative outlet Newsmax, who has been one of the key figures challenging the Nexstar-Tegna deal, and the notion that broadcasters need to consolidate to compete. He testified that major station groups are still bringing in billions in revenue and use their market power to extract favorable terms from cable operators, at the expense of channels like his.
Here are five major takeaways from the hearing:
Too small — or too big?: Curtis LeGeyt, the president and CEO of the National Association of Broadcasters, called the relaxing of ownership regulations “existential for the future of local broadcasting,” citing the competition for ad dollars from the much larger Google and Facebook, and for audience from the likes of Netflix and Amazon. “Simply put, we are doing it with one hand behind our back, because we can’t even gain scale nationally to allow us to compete in those markets,” he said.
Ruddy said that raising the ownership cap “means that two or three corporations will eventually own most stations in the nation and control almost all local news.” He also said that Nexstar already expanded its reach to 70% of U.S. households when it acquired Tribune Broadcasting in 2019, but still fell within ownership limits because of another FCC provision. That allows station groups to count their UHF stations for half of their audience reach.
While a number of lawmakers in both parties have long lamented the power of big tech, some were skeptical Tuesday as to whether the answer was to allow broadcasters to bulk up, too.
“Why would I allow for more consolidation when our biggest problem has been concentration?” asked Sen. Maria Cantwell (D-WA), the top Democrat on the committee.
She added, “Isn’t the crux of the issue that basically, you’re going to be able to own more media markets, and own three TV stations, and the basically decide how to blow them up and give me general programming from New York, which I don’t want?”
While Republicans have generally favored repealing or easing FCC regulation over the years, Ruddy’s opposition shows how the partisan lines aren’t so clear cut when it comes to TV station consolidation. He noted that other groups, like One America News Network and CPAC, also oppose raising or eliminating the cap.
The hearing also lacked contentious partisan moments, but there were some sharp retorts.
After Ruddy told lawmakers that the “TV industry is too important to be handed over to a small number of conglomerates” by relaxing the ownership rules, LeGeyt said that lawmakers “should flatly reject arguments from a single national programmer subject to no similar restrictions, and who invests zero dollars in your local communities.”
Local news languishes: “If you’re a journalist working for Nexstar, you should be starting to post your resume,” Ruddy said, one of a number of broadsides he made against the merger.
But LeGeyt’s argument was that the status quo isn’t working, calling it “untenable.” He said that the money paid by cable and satellite operators to carry stations — or retransmission consent fees — has been decreasing year over year in the past three years. And he said that “if judged on an independent stand-alone basis, more than half of the broadcast newsrooms in this country are not profitable.”
When it comes to local news, LeGeyt also made an argument to try to ease concerns about consolidation, noting that over the past decade, as broadcasters “gained modest additional scale, the number of local news telecasts and hours of locally produced news increased substantially.” He said that from 2011 to 2023, local news telecasts increased by more than 40% and total hours grew by nearly 50%.
Offering a different take was Steven Waldman, president of Rebuild Local News, who said, “Yes, in some cases, merger might lead to more local news, but the evidence is that in many, many cases, it goes the other way that it cuts local news.” He said that the concern shouldn’t be so much on the number of hours of local news, but the number of local reporters, and that perhaps mergers could be contingent on combined companies maintaining or increasing those levels.”
Sports for free: In his opening remarks, LeGeyt hit on an issue that has been of increasing concern on Capitol Hill: The migration of sports to subscription streaming services.
“Keeping broadcasters artificially small makes it harder to compete for increasingly expensive sports rights against our unregulated streaming rivals,” LeGeyt said, adding that broadcasting viewership already is less than half of streaming competitors “as premium sports content further migrates behind streaming paywalls.”
Some senators seized on the issue as one about costs, in a year when affordability is expected to dominate the midterms. Cantwell said that “I do not want my consuming public to have to pay to see content that they can just watch advertising to see. I want it to be cheaper.”
As other lawmakers also brought up the potential of rising prices, Ruddy countered by making the case that it is broadcasters, and their retransmission consent fees, that are being passed on to the customers in cable bills. Giving broadcast companies more market leverage, he said. “Ultimately, who gets screwed, frankly, is the consumer,” he said.
Congress vs. the FCC: The wild card is whether the FCC even has the authority to lift the ownership cap, or even to grant Nexstar a merger waiver.
FCC chairman Brendan Carr has argued that the agency does, citing past court rulings weighing Congress’ legislative actions. At the hearing, another witness, Thomas Johnson, partner at Wiley Rein and former general counsel of the FCC, outlined the legislative and legal reasoning behind his contention that the agency can raise the cap on its own.
Others, including Ruddy and the commission’s sole Democrat, Anna Gomez, have argued the opposite. This week, they were joined by former FCC commissioner Michael O’Rielly, a Republican, who wrote that it was “pure fantasy” to think that the cap could be raised without congressional approval.
One figure who seemed to fall in the skeptical camp: Sen. Ted Cruz (R-TX), the committee chairman who is a friend of Ruddy’s. He pressed each of the witnesses on whether they believed the FCC had the authority, and then asking whether the agency will be challenged in court if it does go ahead and raise the cap.
“I am prepared to litigate the matter,” Ruddy said.
Newsmax vs. Nexstar, and the Trump Effect: In announcing his support for the Nexstar-Tegna deal, Trump wrote, “Letting Good Deals get done like Nexstar – Tegna will help knock out the Fake News because there will be more competition, and at a higher and more sophisticated level.”
Soon after, Carr wrote that Trump was “exactly right.” “Let’s get it done and bring real competition to them.”
At the hearing, some Senate Democrats called out Carr for rendering a judgment on a merger that is still in the middle of an FCC review. Nexstar-Tegna is on day 71 of a 180-day timeline that the FCC gives to reviews. Sen. Ben Ray Lujan (D-NM) said that Carr revealed a “willingness to rubber stamp this merger.”
Ruddy also was critical of Carr. At the hearing, he suggested that the president was getting bad advice from the FCC chairman, and noted that in November, Trump had criticized proposals to raise the ownership cap.
“I think the president makes a lot of good decisions, and he does when he’s fully informed,” Ruddy said. “And I have a disagreement with Chairman Carr, very significant, and I think he’s not playing by common sense rules, which is more diversity of companies leads to more competition and lower prices.”
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