Tegna Take Two
Let’s try that again
Disclaimer / Disclosure long TGNA
August 25, 2025
Nexstar (NXST) and Tegna (TGNA) announced a definitive agreement under which Nexstar will acquire TEGNA for $22 per share in a cash. Committed financing is in place from BofA (BAC), J.P. Morgan (JPM) and Goldman Sachs (GS).
Conditions:
HSR
FCC
Target vote approval
The $1.41 net spread offers a ~7% IRR if the deal closes by September 2026. Meh. But Standard General wanted to buy TGNA for $23 in cash just a few years ago. They could come back with a bid that could launch a bidding way. Meanwhile, the regulatory environment is as favorable as ever for approving such a deal. No one cares or should care about the policy implications of broadcaster consolidation.
The deal would combine NXST’s 200 TV stations in 116 markets with Tegna’s 64 TV stations. Sinclair (SBGI) also made TGNA an offer, proposing to separate its non-broadcast businesses and merging its broadcast stations with Tegna. Sinclair currently owns 185 TV stations in 85 markets.
The parties are about to run the table on regulatory issues in a way that will clarify what deals can be done and increase the value of broadcasting licenses. According to my former colleague and current Morgan Lewis partner Andy Lipman, any proposed acquisition of Tegna by either Nexstar or Sinclair will get a DoJ second request and extended FCC review. However, the Trump administration will be far more open to such combinations than the Biden administration was. There are several FCC ownership restrictions, but they are antiquated and likely to be waived by this FCC leadership.
FCC rules limit nationwide ownership of TV stations to 39% of households. Last month the FCC requested comments to update the record on its 2017 proposal to kill the cap. With comments closing later this month, the FCC will probably move swiftly (by government standards) and eliminate the cap this year. Both Nexstar and Sinclair are close to the limit and would need a revision or waiver of the cap to buy Tegna.
Under current FCC rules, a merger cannot result in the ownership of two of the top four TV stations in a local market. The FCC has recently waived this restriction for several companies. Last month, the Eighth Circuit Court of Appeals found the FCC had arbitrarily when it retained the rule during its 2023 review. The court withheld its mandate for 90 days to allow the FCC to provide a good reason to modify or postpone the change. They almost certainly won’t. It is reasonable to expect the prohibition to die early in Q4.
While the Top 4 Prohibition will probably be killed before the FCC issues a decision on the merger, the FCC’s ownership limit on two TV stations in a local market will still be in place. An acquisition by Nexstar or Sinclair would result in common ownership of three full power TV stations in several local markets. The parties will need a waiver of the limitation or divest stations to a third party. The FCC will probably grant it.
Cable and satellite operators will oppose any Tegna acquisition in front of the regulators. The usual suspects of unions and programmers will also intervene. This presents more delay than deal risk, but they could get some behavioral conditions and divestitures. The FCC will demand that they abandon DEI and don’t discriminate politically. They also will put conditions demanding specifics on tower construction and maintenance.
The DOJ’s will focus on market concentration. They look at TV mergers based on the local TV advertising market and flagged markets with >~40-45% or more market share. The parties should challenge this antiquated market definition. The correct market definition include cable advertising and outdoor advertising as well as other types of local advertising. Sadly for broadcasters: they don’t have pricing power. They wouldn’t have pricing power if they had 100% of the broadcasting licenses. The reviews will take about a year before a deal closes.
March 19, 2026
Nexstar Closes Tegna Acquisition
Company Receives Approval of FCC and DoJ
Nexstar (NXST) closed its acquisition of Tegna following deal approval from the Federal Communications Commission (FCC) and the United States Department of Justice (DOJ).
Nexstar CEO Perry Sook commented:
This transaction is essential to sustaining strong local journalism in the communities we serve. By bringing these two outstanding companies together, Nexstar will be a stronger, more dynamic enterprise—better positioned to deliver exceptional journalism and local programming with enhanced assets, capabilities, and talent. We are grateful to President Trump, Chairman Carr, and the DOJ for recognizing the dynamic forces shaping the media landscape and enabling this transaction to move forward.