The mid-19th century was defined by the gold rush, as investments poured westward to fund the mining of the precious metal. The early 20th century was powered by the oil boom, as demand for petroleum products skyrocketed and new pockets were uncovered around the country. Broadcast spectrum may not be as valuable as gold, or as versatile as oil, but there are early signs that beginning in 2025, it will be the asset that has Wall Street salivating. Call it the Broadcast Land Grab.
The incoming Trump administration has made it clear that deregulation will be at the top of its priority list, and the companies that own local TV stations — Nexstar, Sinclair, Gray, E.W. Scripps and Tegna, among many others — are practically giddy at what it could mean for them.
Earnings calls for broadcast station owners after the election felt like the industry was breathing a collective sigh of relief. “We’re very excited about the upcoming regulatory environment,” Sinclair CEO Chris Ripley told analysts Nov. 6. “It does feel like a cloud over the industry is lifting here.”
Added Tegna CEO Mike Steib on Nov. 7, “I am certainly of the personal opinion that the regulatory regime needs to be reevaluated.”
And, noted Nexstar CEO Perry Sook on an earnings call Nov. 7, “Obviously, the number one legislative priority of Nexstar and our trade association, the NAB, is the deregulation of ownership at both the national and the local level.”
And the CEOs are likely to get what they want, at least at the FCC, where chair Jessica Rosenworcel will exit next year in favor of a more business-friendly chairman, with current GOP commissioner Brendan Carr floated as a likely contender.
Wall Street already is preparing for what comes next, with Wells Fargo’s Steven Cahall responding to the election by upgrading Sinclair from “underweight” to “equal-weight.” In a note Nov. 7, Cahall wrote: “A Republican FCC from 2025 will likely improve the outlook for broadcasters by deregulating and allowing for consolidation.”
As Cahall observes, however, there is a lot that still needs to happen. While a relaxed Department of Justice and Federal Trade Commission are likely to be a net-positive for big business, broadcasters are focused squarely on the FCC, where old rules have held back consolidation. There are some things a GOP-led FCC can do quickly, like relaxing the duopoly rules, which limit how many stations an owner can have in one market, or applying the “UHF Discount,” which lets station owners expand by buying stations on the UHF frequency. “The laws around local broadcasts are incredibly outdated,” says Alan Wolk, founder and lead analyst at the industry research firm TVREV. “They made sense in an era when streaming wasn’t a thing.”
If you talk to a high-level station executive, it is never long before their ire turns to Big Tech companies like Google and Meta, which have sucked up most of the advertising dollars from local and regional businesses that used to be the most loyal buyers of broadcast TV advertising.
“Google makes 50 times the advertising revenue that any broadcaster does in our markets, and TikTok has a greater share of news viewing by young audiences than any single broadcaster and is owned by a foreign adversary,” Steib said. “And yet today, we’re not allowed to buy a Fox station in Waco, Texas.”
There will be other changes, however, that will require buy-in from Congress, meant to help broadcasters try and take on the tech companies on a more even playing field. At the top of that wish list is lifting — or even eliminating altogether — the national ownership cap, which limits the owners of broadcast TV stations to 39 percent of TV households.
Should it be lifted, it is all but certain that the country would see its first national broadcaster owning stations in all (or nearly all) local markets in relatively short order.
“Our industry’s real competition comes from Big Tech companies who have unfunded access to every screen in America from phones, desktops, to the TV in the living room, yet our ability to compete with those behemoths is stymied by regulations that were last updated in 2004,” Sook said. “To preserve local journalism, this industry needs strong companies who can compete on a level playing field for both viewers and advertisers on every screen in America, not just some of them.”
The executive also has argued that the push can be done in a bipartisan way, given Republican views on deregulation and a Democratic desire to help prop up local news outlets.
Indeed, in the broadcast industry, Nexstar is seen as the most likely station owner to try and make a play for national scale, should Congress rewrite the rules and eliminate the cap.
Ripley and Steib have both told Wall Street that Sinclair and Tegna could be buyers or sellers, depending on what is best for shareholders (“We intend to participate in M&A,” Ripley said, with Steib making similar remarks). But the Irving, Texas-based Nexstar is led by the ambitious Sook, who spearheaded the launch of the NewsNation cable channel and acquisition of The CW, both national plays by a local station owner.
Should the FCC relax ownership rules and the station cap vanish, there would be a station land grab unlike anything the country has seen. “I think in a lot of the smaller markets, we are going to see fewer broadcasts, or joint ownership, things like that, where a bigger company comes in,” Wolk says. “You have your Sinclairs and Nexstars and Tegnas, and then you also have some station that great grandpa founded that’s been in the family for years. It’s a viable enough business, but, you know, for how much longer?”
A Nexstar that has stations in nearly every TV market may be able to fight for ad dollars far more effectively than the family TV station in Grand Forks, North Dakota, or Zanesville, Ohio.
But the looming broadcast land grab also comes as the slow-burning conflict between local TV station owners and the big national broadcasters simmers.
Because of deals struck years ago, the national networks like ABC, CBS and NBC negotiate streaming deals for all their affiliates (that is not the case for carriage on traditional pay TV platforms like cable or satellite, where the station owners negotiate for themselves). And many of those national networks have streaming services of their own that carry local TV (Disney owns Hulu, NBCUniversal owns Peacock, and Paramount owns Paramount+, which all have tiers that stream local stations).
Some observers think the conflict that has burned in the background could burst to the forefront in the coming years, as network owners reevaluate their investments in content and with station owners seeking more scale and autonomy.
“One issue that [station owners] all have in the back of their mind is, ‘What happens to us if the networks stop giving us content?’ Which is a distinct possibility in the next couple of years,” Wolk says. “At what point does NBC say, ‘Why are we making original programming for our O&Os and affiliates? We can just put it on Peacock and let them get it the next day or the day after.’ ”
And at Paramount, incoming president Jeff Shell has told Wall Street that “If there’s going to be a change for CBS, we’re going to probably manage it a bit more aggressively for cash flow … Meaning making some harder decisions on time periods going forward, which you have to when you have a declining business.” When he was running NBCU, Shell floated the possibility of giving up the 10 p.m. hour and handing it back to affiliates.
In a new regulatory environment and a new media environment, where TV is threatened by tech, some big changes could be coming to broadcast TV over the next four years. But what form those changes take is still as fuzzy as a TV just out of reach of the nearest broadcast tower.
Stay tuned.
This story first appeared in the Nov. 13 issue of The Hollywood Reporter magazine. To receive the magazine, click here to subscribe.
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