FCC upholds Smith's Mission with Nexstar


A complex and comprehensive series of agreements amounting to an LMA between Nexstar Broadcasting and Mission Broadcasting has been upheld by the FCC in the face of a challenge from an in-market competitor. The stations involved are Nextar’s KNWA-TV Rogers AR and Mission’s KFTA-TV Ft. Smith AR.

Nexstar is headed by Perry Sook, Mission by David Smith. Nexstar bought both stations from J.D.G. Television Inc. for 10M in a deal filed with the FCC 10/30/03. It then spun KFTA to Mission for 5.6M and put the LMA elements in place in a deal filed 4/18/06.

Among the elements included in the LMA are a joint sales agreement (JSA), and shared services agreement (SSA) under which Nexstar provides backroom administrative services, and reciprocal loan guarantees. Further, Nexstar will produce local news for Mission.

The challenging in market competitor is Fort Smith 46 Inc., a subsidiary of Equity Broadcasting, which owns and operates a number of low power and Class A television stations in the same Ft. Smith-Fayetteville-Springdale-Rogers AR DMA. Equity, which used to carry Fox on KPBI-CA, lost it to the aforementioned KFTA.

This underscores another charge. At the time that Nexstar bought both stations, they formed a flagship/satellite NBC twosome, and it applied to have the necessary waiver carried forward under their ownership. Equity charges that Nexstar’s application for satellite status for KNWA due to its alleged inability to survive on its own constituted misrepresentation.

In the end, the only thing that the FCC disallowed was an agreement under which KFTA would carry KNWA on a digital side channel and vice versa. Also the two were admonished for not listing pending character allegations in dealings with a cable system. All other aspects of the business relationship between Nexstar and Mission were upheld as consistent with FCC policy and precedent.