The American Cable Association has asked the FCC to block, or impose strict conditions on Nexstar Broadcasting's proposed $4.6 billion merger with Media General.
"The FCC should deny this TV station merger or at least impose conditions to safeguard the public interest," ACA President and CEO Matthew M. Polka said. "Both Nexstar and Media General have a history of using consumers as pawns in retransmission consent negotiations with pay-TV operators and have repeatedly blacked out their programming during contractual disputes, to the detriment of the consumers they are supposed to serve."
In its letter to FCC Chairman Tom Wheeler, the ACA singled out so-called "after-acquired" clauses it said are favored by Nexstar in its acquisition deals. These clauses produce immediate increases in retransmission consent fees following ownership control of stations.
The ACA's public shot at Nexstar's merger came as Verizon (NYSE: VZ), in an ex parte filing detailing a meeting with FCC Media Bureau and General Counsel officials, seemed to take a rhetorical shot at Nexstar, which threatened to black out both the Super Bowl and the Oscars during a retrans dispute with Cox in late January/early February
"We stated that blacking out a signal just before the airing of marquee programming, such as the Super Bowl or the Oscars, should constitute per se evidence of bad faith," Verizon said in its filing. "This broadcaster practice is intended to harm the greatest number of consumers and the Commission should strongly discourage it."
Nexstar won a battle against Meredith Corp. to take over Media General in January.
Irving, Texas-based Nexstar agreed to pay $4.6 billion in cash and stock for Media General, creating a broadcasting company that controls 171 stations serving 100 U.S. markets -- a formidable negotiating opponent for any pay-TV operator to face in a broadcast retransmission licensing negotiation.
"New Nexstar" will reach 39 percent of U.S. TV homes, the maximum allowed reach under FCC station ownership rules. As part of its breakup deal, Meredith also gets the right to negotiate for any station or other asset that Media General has to part with in order to get regulatory approval for the Nexstar purchase.
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