Texan media company Nexstar Media Group announced today it had completed a deal to purchase Chicago’s Tribune Media for US$4.1bn. Reuters reports that completion of the deal will make Nexstar the largest operator of local television stations in the US.
Nexstar, which is market-capped at $3.8bn, is reportedly in talks with several banks who provide funding for the deal.
Nexstar’s network of 174 television stations already reaches an estimated 39% of all US households. Combined with Tribune Media’s 42 local television stations, which reach approximately 50mn households; its national entertainment cable network, WGN America, which has a reach of over 77mn households; and 54mn monthly users across company’s digital applications and web presence, Reuters predicts that number could become significantly higher.
The Nexstar-Tribune deal follows the collapse of negotiations earlier this year between Tribune and Sinclair Broadcast Group, which planned to purchase Tribune for $3.9bn. The deal was abandoned following regulatory hurdles.
“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”, Variety Magazine reports. “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.”