Media General may be mulling Nexstar's offer to buy the company for $4.1 billion, but if the parties agree, the FCC and Department of Justice will also have to do some mulling and weigh in before any deal could be finalized. Former top FCC official Adonis Hoffman thinks that regulators can be persuaded, but it is no sure thing.
“No stranger to the FCC, Nexstar will have to convince the regulators that this merger will be in the ‘public interest’ and will not stifle competition,” he told B&C. “These are not insurmountable hurdles, but could be dicey, given the intense scrutiny the FCC has given to Nexstar's recent deals, and a few skeptics on the Eighth Floor."
Hoffman, currently chairman of Business in the Public Interest, calls Nexstar a well-run company and one that has been a leader in selling stations to African American broadcast owners. He says he thinks the deal would have a good shot at regulatory approvals but that it is no sure thing. “Bottom line, this merger will not be a slam dunk, and Nexstar should expect that it may have to shed some assets.”
Hoffman says one takeaway from the proposed deal is that the broadcasting business is alive and well, even in the shadow of an auction meant to incent broadcasters to give up some or all of their spectrum.
"Nexstar's bold move to acquire Media General is the latest iteration of the consolidation in broadcasting. If anyone thought good old fashioned TV was on the decline, they should pay attention to the dollars being committed in the over-the-air TV space."
It is unclear how long it would take the FCC to vet the proposal. For example, it took the commission 327 days to approve the Sinclair-Allbritton station deal—it's target, at least informally, is 180 days.
Hoffman points out a deal vetting would come as the FCC is "is laser focused on the incentive auction, defending net neutrality, two mega-cable mergers, and more oversight from Congress, among other things."