Nexstar Media Group, whose pending deal to acquire Tribune Media will make it the No. 1 owner of local TV stations in the U.S., said it is selling off 19 stations in 15 markets, a move that will net the company $1.32 billion in cash.
Rival station groups Tegna and E.W. Scripps are acquiring the stations. Nexstar said it is in active talks to divest two stations in Indianapolis, Scripps wound up with one of the jewels in the Tribune portfolio, New York’s WPIX, a CW affiliate with deep roots in the nation’s largest market. In that station’s case, the buyer and seller agreed on a provision that offers Nexstar a window from 2020 to 2021 when it can reacquire WPIX.
Since proposing its takeover of Tribune last December, Nexstar has moved with haste to assure regulators it would not travel the same path as Sinclair Broadcast Group. Sinclair’s own deal for Tribune blew up last summer after a series of moves prompted closer scrutiny by the FCC. The commission has long maintained a 39% cap on station ownership, a rule designed to limit monopolistic behavior. The cap is currently under review, and could be eased to reflect broadcasters’ concerns that they are being unfairly restricted in a marketplace in which, they argue, they compete against tech giants just as much as they do with each other.
Nexstar said it intends to use proceeds from the divestitures to fund the Tribune acquisition and to reduce debt. It reiterated its expectation for the Tribune deal to close by year-end.
Perry Sook, chairman, president and CEO of Nexstar, said the divestitures reflect the company’s “comprehensive regulatory compliance plan” related to the Tribune deal. The deals with reputable groups like Tegna and Scripps, he added, “represent opportunities to transact with two established broadcast groups that share Nexstar’s commitment to upholding the FCC mandate and public interest principles of diversity and localism.”