In a four-page letter sent Oct. 5 to longtime Federal Communications Commission Secretary Marlene Dortch, National Association of Broadcasters General Counsel and EVP/Legal and Regulatory Affairs Rick Kaplan implored the FCC to move forward with its approval of Nexstar Broadcasting‘s merger of Media General.
“The merits of the proposed transaction have been thoroughly and comprehensively argued before the FCC, and the Department of Justice has blessed the merger,” Kaplan says. “There is no good reason for further delay.”
DOJ in early September gave its blessing to Nexstar Broadcast Group’s $4.6 billion merger acquisition of Media General Corp. – so long as Nexstar sheds seven stations in six different markets.
If the Commission approves the merger, Kaplan argues, “reflexive application of its reverse auction application rules to prevent the transaction’s timely consummation serves no practical purpose and only will exacerbate the harm to broadcasters, both large and small, of the lengthy, continuing freeze placed on the entire broadcast television industry.
In a September interview with RBR + TVBR, broker George Reed, Managing Director of Media Services Group, was among many in the industry who viewed the Justice Department as the true hurdle to a Nexstar-Media General deal. “There are no real FCC issues, and I don’t see any reason why it wouldn’t close,” he said.
But the FCC has not moved forward, and cites the ongoing broadcast spectrum auction as its reason for not doing so.
The auction is presently in the second stage of the Reverse Auction, with 40 rounds of bidding completed through Oct. 5.
The auction is using a three-session daily bidding schedule for the remainder of the week. There will be no bidding on Monday, in observance of the Columbus Day federal holiday.
With no fixed date as to the conclusion of the Reverse Auction’s second stage, the NAB laments that Nexstar and Media General “are frozen in place” while they wait for the FCC’s determination.
“Given DOJ’s approval, and the fact that the Commission has well exceeded its 180-day shot clock for reviewing major transactions, the National Association of Broadcasters urges the Commission to fulfill its duty to process the transaction immediately,” Kaplan said.
The NAB also takes the FCC to task for creating “ongoing and unnecessary uncertainty” regarding associated transactions for divestitures that, if consummated, “will increase female and minority ownership of television stations and result in the sale of other stations to small, independent broadcasters.”
Nexstar will hold its Q3 2016 conference call on Nov. 8 at 10 a.m.
At market close Wednesday, shares in NXST were near a five-year high of $58.40.
That’s a huge jump from its Feb. 11 close of $35.55 — and a huge vote of confidence for investors that the Media General deal is the right thing for the company.
