Nexstar-Media General merger blasted by cable association for retrans clauses

The American Cable Association says the Nexstar-Media General merger will cost consumers $24 million in the first year alone.

The American Cable Association (ACA) is seeking to limit Nexstar and Media General’s legal options to accrue more than $20 million in revenue in the two companies’ proposed broadcast TV station merger.

In an ex parte filing to the FCC on Friday, the senior vice president of government affairs at the ACA, Ross Lieberman, wrote that clauses in Nexstar’s existing retransmission consent agreements will force dozens of multichannel video programming distributors (MVPDs) and millions of consumers to pay higher fees and adhere to other “more onerous terms and conditions, totaling at least $24 million in just the first year.”

The “after-acquired station” clauses allow Nexstar to acquire TV stations in new markets and replace lower retransmission consent rates and less demanding terms and conditions with Nexstar’s own much higher rates, according to the filing. The ACA is a vocal opponent of the merger, and Lieberman urged the FCC to place conditions on Nexstar that will limit the triggering of those clauses. 

“As a direct result of the merger, MVPDs who have retransmission consent agreements with Media General, and who have been forced to accept after-acquired station clauses in their retransmission consent agreements with Nexstar, will see the retransmission consent fees they are paying for former Media General stations increase from between 11 percent to 125 percent as rates automatically reset at Nexstar agreement levels over the remaining life of the agreements,” Lieberman wrote in the filing.

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It remains unclear when the FCC will act on the Nexstar-Media General agreement. According to Multichannel News, the companies may receive a waiver from the FCC that would pave the way for the agency to act on the transaction as early as this week. The FCC said previously that it would not approve any deals for the duration of the auction if they involved stations potentially in the auction, but the Nexstar-Media General merger does include stations included in the auction.

The ACA’s filing states that the FCC has an opportunity to protect consumers from paying higher cable rates due to the Nexstar-Media General merger, which will trigger multiple after-acquired station clauses. It proposes that the commission approve any license transfers on the condition that Nexstar agrees not to exercise its right to trigger the after-acquired station clauses for the duration of its agreements with MVPDs.

Nexstar's $4.6 billion takeover of Media General is set to create a TV broadcast behemoth, controlling 171 stations in more than 100 markets.