Nexstar-Tribune Merger: Déjà Vu All Over Again

When Nexstar spins off stations to complete massive deal, it’s an opportunity to advance minority ownership
Publish date:

"The Nexstar-Tribune merger presents a similar opportunity to advance minority ownership and opportunity, and the FCC DOJ should take full advantage of the chance." -Armstrong Williams

Armstrong Williams

Armstrong Williams

In the words of Yogi Berra, “it’s déjà vu all over again.”

The announcement that Nexstar Media Group will be buying Tribune Media for $4.1 billion sure looks a lot like the $3.9 billion merger Sinclair Broadcast Group had with Tribune. The merger will make Nexstar the largest local TV broadcaster in the nation, with 213 stations. In addition, under the UHF Discount, which the U.S. Court of Appeals for the DC Circuit recently upheld, the FCC will count only half of the audience reached by nearly all of the stations Nexstar will hold. So while actual coverage may exceed the 39% cap on the National Audience Reach any station owner may have under the Communications Act, that number will be halved, allowing the merger.

This is why the Department of Justice and FCC will undoubtedly have the same concerns they did with the Sinclair deal and require numerous station divestitures. Accordingly, like the proposed Sinclair-Tribune merger, which Tribune terminated in August, the Nexstar-Tribune merger presents an historic opportunity to advance minority ownership and diversity within the context of the divestiture requirements the FCC and the DOJ will have.

As one of the only African-American owners of television stations in the nation, I sincerely hope this happens.

Over 50% of the employees at my Howard Stirk Holdings (HSH) companies are minorities. Minorities are employed as station general managers, directors of operations and creative directors. None of these important advancements would have been possible without the opportunities afforded by my working with an experienced broadcaster, in Sinclair. Through the use of joint sales agreements and shared service agreements, I had the opportunity to obtain financing that would have otherwise been out of reach, and to learn and operate in the highly competitive broadcast industry.

The Nexstar-Tribune merger presents a similar opportunity to advance minority ownership and opportunity, and the FCC DOJ should take full advantage of the chance.

Forty years ago the FCC released its Statement of Policy on Minority Ownership of Broadcast Facilities, acknowledging the need to enhance minority broadcast ownership. Precious little has actually happened since then to advance such ownership. Oh sure, there has been plenty of rhetoric by the FCC and “public interest” groups about minority ownership uniquely advancing community service and diversity, and providing an overarching public benefit. But in my case, just at the critical time when there was a real chance to advance African-American ownership with the spinoff by Sinclair to my HSH company of three Tribune stations in markets with no minority television ownership, some complained that the sale shouldn’t be permitted because I was buying the stations at an under-market price. The claim was, of course, unsubstantiated, but it was nevertheless shocking to me that, rather than credit Sinclair for helping advance minority ownership and diversity, and me for being willing to take the capital risk, groups claiming to encourage minority ownership were vigorously opposing it.

So in the hope that history does not repeat itself, minorities should be accorded a real opportunity to acquire the licenses Nexstar will be required to spin off, regardless of the price to be paid. Hopefully the FCC and DOJ understand that as they review this merger, and they work to assist the real advancement of the public interest with the expansion of minority ownership, and remove any impediments that might derail this historic opportunity.

Armstrong Williams is owner of Howard Stirk Holdings.