By David Shepardson WASHINGTON (Reuters) -Shares in Tegna fell 5.5% on Monday after President Donald Trump criticized a proposal to lift the current cap on local television station ownership, which is necessary for the company to be acquired by Nexstar Media. Acquiring Tegna would expand Nexstar’s presence covering 80% of TV households across key geographies […]
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Tegna shares fall 5% after Trump criticizes lifting local TV ownership cap
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By David Shepardson
WASHINGTON (Reuters) -Shares in Tegna fell 5.5% on Monday after President Donald Trump criticized a proposal to lift the current cap on local television station ownership, which is necessary for the company to be acquired by Nexstar Media.
Acquiring Tegna would expand Nexstar’s presence covering 80% of TV households across key geographies under the $3.54 billion deal. Trump on Sunday posted a story on social media that said lifting the cap would be a “disaster” for conservatives and added he would “not be happy” if the move allowed Comcast-owned NBC or Disney-owned ABC to expand.
Shares in Nexstar fell 3.6%.
Federal Communications Commission Chair Brendan Carr said last month the commission had made no decision on whether to lift the current cap on television station ownership.
Current FCC rules limit a company from owning broadcast television stations that reach more than 39% of U.S. television audience households, but stations with weaker over-the-air signals can be partially counted against a company’s ownership cap.
Trump made comments on an article from Newsmax CEO Chris Ruddy and said the FCC should not take any action that would benefit ABC or NBC. “If anything, make them SMALLER!” Trump wrote.
Ruddy in a filing with the FCC in July said “Americans of every political persuasion, demographic, and location would be harmed by any weakening of the current national television multiple ownership limit.”
Nexstar last week said the cap prevents the company from competing fairly “including with legacy media and Big Tech.” It added the deal “will provide oxygen to a number of local television stations that, under the Commission’s own criteria, currently would be considered as failing and are unlikely to survive as standalones.”
Trump has repeatedly called on the FCC to take action against ABC and last week suggested the commission should move to revoke the broadcast licenses of ABC stations following questions about murdered journalist Jamal Khashoggi that he called “insubordinate.”
On Wednesday, the FCC said it was opening a review of agreements between national networks and local broadcast stations.
Carr said he believed the cap could be revised by the commission without approval of Congress. Democratic FCC Commissioner Anna Gomez said she did not think it had that authority.
Nexstar said on Monday it believes the landscape is ripe for regulatory reform and the company is “on the path to completing our transaction. We agree with President Trump that the status quo is no longer acceptable, nor should the government do anything to strengthen the stranglehold of legacy media and Big Tech on the marketplace of ideas.”
Tegna did not immediately respond to requests for comment.
(Reporting by David Shepardson; Editing by Chris Reese)