December 4, 2018

Nexstar's $4B Tribune deal may force Fox 61 sale

Photo | MICHAEL C. BINGHAM
Photo | MICHAEL C. BINGHAM
Nexstar's ownership of New Haven's WTNH-TV (pictured) will likely force it to sell Hartford's WTIC-TV (Fox 61), which it will acquire as part of its $4.1 billion deal for Tribune Media.

Nexstar Media Group Inc. on Monday announced an agreement to buy Tribune Media Co. for approximately $4.1 billion, a deal which would make it the largest local U.S. TV station operator.

Nexstar is acquiring Tribune Media in an all-cash transaction that values the company at $46.50 a share. Including the assumption of debt, the total value of the deal amounts to $6.4 billion.

The acquisition would give Nexstar stations in eight of the nation's 10 largest markets and make Nexstar the company that owns or controls more U.S. local televisions stations than any other.

In Connecticut, Nexstar will assume ownership of WTIC-TV (Fox 61), headquartered in Hartford. The company already owns New Haven-based WTNH-TV. Federal Communications Communications (FCC) regulations forbid a single owner from owning multiple television stations in the same market. (Hartford-New Haven represents a single TV market, the nation's 33rd largest, according to Nielsen, which measures television ratings.)

"Current FCC rules say that Nexstar can't own both WTNH and WTIC, so one will have to be sold," according to Ben Bogardus, an assistant professor of journalism at Quinnipiac University. "Fox 61 is the more likely candidate, since Nexstar has put a lot of time and money into integrating WTNH into its broadcast ecosystem over the past two years," he said.

Possible buyers could include the Sinclair Broadcast Group or the Fox Television Stations, both of which have expressed active interest in Tribune stations in the past, Bogardus added.

Top of the local-TV heap

Based in Irving, Tex., Nexstar owns, operates and provides sales and other services to 174 television stations reaching nearly 39 percent of all U.S. television households.

Based in Chicago, Tribune Media owns or operates 42 local television stations reaching approximately 50 million households. It also owns national entertainment cable network WGN America, which reaches more than 77 million households, and a vast array of digital applications and websites that reach some 54 million monthly unique visitors online, according to its website. It also has a stake in the Food Network.

Tribune emerged from bankruptcy in late 2012 and completed a spinoff of its newspaper assets in 2014. These included the Hartford Courant, the state's largest daily newspaper, which is now owned by Tribune Publishing Co., a publicly traded corporate entity that is separate from Tribune Media Co.

Unlike other forms of U.S. mass media, which are mostly privately owned and free from government interference by virtue of the First Amendment ("Congress shall make no law abridging the freedom of speech, or of the press…"), broadcast media are regulated by the federal government because radio and television use airwaves technically "owned" by the public (although the number of U.S. households that receive television programming "over the air" in 2018 is miniscule).

The mechanism for that regulation is the FCC, which since its establishment in 1934 has restricted concentration of ownership of radio and television stations. The legal pretext is to maintain a multiplicity of station owners and viewpoints in broadcast media.

Declaration of diminishing independence?

The increasing concentration in ownership of all mass media in the U.S. that began in the 1980s poses a long-term economic and political challenge to independent ownership of mass media voices in America.

"Nationally, this deal is another blow to the idea of locally owned television, which is more responsive to viewers in the cities they serve," Bogardus said. "Mega-owners enforce a common news philosophy when it comes to things like the importance of investigative journalism and sports coverage, and the use of low-cost "one-man band" reporters to cover news.

"With smaller ownership groups, however, stations are freer to base their programming decisions on local needs and allow for greater innovation in news coverage," Bogardus said. "That's something which should be encouraged over the cookie-cutter mentality that comes from the growth of mega-ownership groups."

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