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Tribune Media to Be Acquired by Nexstar Media Group

Texas-based Nexstar Media Group has set a $4.1 billion deal to acquire Tribune Media.

Reuters first reported the deal, which is expected to be unveiled Monday morning. Tribune declined to comment. A rep for Nexstar could not immediately be reached for comment on Sunday.

The deal to acquire Tribune’s 42 stations and WGN America cabler will make Nexstar the nation’s largest owner of TV stations by volume with more than 200 outlets. Nexstar already owns 170 stations covering nearly 39% of U.S. TV households. Nexstar outbid private equity giant Apollo Global Management with an all-cash offer valuing Tribune at $46.50 per share. The deal comes four months after Tribune’s previous acquisition pact with Sinclair Broadcast Group imploded amid regulatory hurdles and political controversy given Sinclair’s size and the notably partisan tilt to the company’s political opinion and commentary programming and the tenor of its newscasts.

Tribune’s marriage with Nexstar will not be as politically radioactive as the Sinclair union, but it will still create a broadcast colossus. Nexstar unquestionably will have to divest numerous stations to comply with the FCC’s media ownership rules. The addition of Tribune stations will put Nexstar’s national reach well past the existing 39% limit, even with the regulatory reach discount for UHF stations. With Democrats retaking control of the House of Representatives, efforts to loosen up the FCC’s broadcast TV ownership restrictions — which limit station ownership to no more than 39% of U.S. TV households — are probably DOA, industry observers believe.

For sure, the Nexstar-Tribune pact will likely face some opposition at the FCC level from advocacy groups concerned about the decline of localism and the concentration of broadcast TV assets into a handful of mega-sized owners. Broadcasters counter that the fragmentation of the media landscape has made it much harder for small independent operators to survive. “Scale” is the watchword across media M&A these days, and local TV stations are no exception.

The new-model Fox is expected to seek to buy numerous Tribune-owned Fox affiliates as part of the transaction. Fox had a deal with Sinclair to acquire seven stations for $910 million, but that was scrapped after Tribune and Sinclair called off their nuptials in August amid lawsuits and public bickering over Sinclair’s pugnacious approach to making the regulatory case for approving the deal.

Fox may angle for more than the previously identified seven Fox affiliates. Nexstar already controls a big chunk of the distribution for Fox Broadcasting Co., so Fox would have incentive to buy up stations and contain the company’s grip on the network.

Nexstar’s pursuit of Tribune was no surprise. The company has been on an acquisition spree for nearly a decade. It was in the hunt for Tribune when the company was first put up for sale in early 2017.

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