D.C. Memo: ‘Nexstar Wins and Ruddy Loses,’ New Street Analyst Claims
Blair Levin thinks Nexstar-TEGNA will get approved if NBC and ABC can’t go on TV station buying spree.
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39%: Was President Trump just shooting from the hip the other day about the FCC’s TV station ownership rules? Quite likely – and that’s good news for the Nexstar-TEGNA merger, New Street Research policy analyst Blair Levin said in a client note Tuesday. In the end, Levin said Trump will not have a problem with Nexstar CEO Perry Sook’s $6.2 billion TEGNA deal if FCC Chairman Brendan Carr can assure Trump that it will mean ABC and NBC – whom Trump called “radical left networks” – can’t get bigger by acquisition. “The risk that the FCC will not act in a way to allow the [Nexstar] and [Sinclair] to consolidate the television broadcast sector has risen but we still think the most likely result is still a rule change and FCC and DOJ approval of the deals,” Levin said. The “rule change” was a reference to the FCC’s 39% cap on TV household reach, which Newsmax CEO and Trump confidant Chris Ruddy wants left unchanged. That would mean that Nexstar-TEGNA – at 56.4% − can’t be approved without FCC help, probably a waiver. “There is no doubt that there is considerable turmoil at the FCC, NAB, and at [Nexstar] and [Sinclair] about the path forward considering Trump’s comments. But we see a path forward for them to accomplish their objectives,” Levin said. “We think the most likely result is that, to put it simply, Nexstar wins and Ruddy loses.” In his client memo, Levin did not explore whether the FCC has the legal authority to waive or abolish the 39% cap. Democratic FCC Commissioner Anna Gomez has said the agency has authority to do neither. (More after paywall.)
