The Federal Communications Fee has hit Nexstar Media Group and its enterprise associate Mission Broadcasting with a $1.2 million tremendous and an order to promote WPIX-TV New York or different stations to come back into compliance with longstanding station possession limits.

The fee on Thursday issued a 42-page choice in its probe of Nexstar’s ties to Mission Broadcasting and whether or not their enterprise settlement violated the FCC‘s attain restrict on TV station possession. The fee’s concluded that Nexstar’s near-total oversight of WPIX’s operations gave the station big efficient management of treasured TV business actual property — a full-power broadcast TV station within the nation’s largest market. The fee fined Mission $612,395 for its half within the exercise.

The regulatory dust-up stems from Nexstar’s $4.1 billion acquisition of Tribune Media in 2019. The deal made Nexstar Media Group the nation’s largest proprietor of TV stations at almost 200. Tribune’s 42 stations included robust retailers within the nation’s prime three TV markets: WPIX-TV New York, KTLA-TV Los Angeles and WGN-TV Chicago. However the deal put Nexstar properly over the FCC’s rule that no single entity can personal stations reaching greater than 39% of U.S. TV households. Nexstar needed to divest greater than 20 stations to remain underneath the station cap. WPIX was among the many stations that have been offered off, partially as a result of the New York market alone accounts for for six.5% of the whole U.S. TV universe. Promoting off WPIX to Mission in 2020 allowed Nexstar to maintain extra stations underneath its roof. With WPIX’s 6.5% attain added to Nexstar’s present portfolio, the corporate’s complete U.S. footprint stands at about 45%, the fee mentioned.

The detailed report asserts that the working settlement between Nexstar and Mission is a thinly veiled strategy to get across the fee’s possession cap and different guidelines.

The FCC gave Nexstar and Mission two choices to treatment the violation inside 12 months: Promote WPIX to an unaffiliated third get together, or promote sufficient different Nexstar stations to convey the corporate consistent with the 39% restrict.

“Nexstar and Mission should undertake considered one of two choices inside twelve months of the issuance of any forfeiture order or cost of the forfeiture proposed on this [Notice of Apparent Liability], whichever comes first, whereby both (1) Mission divests WPIX to an unrelated third get together, or (2) Mission formally sells WPIX to Nexstar and the Events file an utility looking for Fee consent to the project of license, with Nexstar divesting a enough variety of different stations to cut back its nationwide protection footprint in line with the Nationwide Possession Cap.”

Perry Sook, Nexstar’s chairman and CEO, defended the corporate’s conduct and promised to attraction the fee’s choice.

“We’re extraordinarily dissatisfied in at this time’s motion by the Federal Communication Fee relating to our relationship with WPIX-TV and we intend to dispute it vigorously,” Nexstar’s founder mentioned. “We imagine the FCC has been misled by the customarily distracting noise within the media ecosphere and that it has utterly misjudged the information. The information are that Nexstar has at all times complied with FCC rules and that its relationship with WPIX-TV underneath a Native Advertising Settlement (LMA) was authorized by the FCC in 2020, when WPIX-TV was bought by Mission Broadcasting, Inc. Nexstar believes that joint working, shared service, and native advertising and marketing agreements like these through which it’s engaged are vitally necessary to take care of a aggressive media market and to allow broadcasters to proceed investing in native information, investigative journalism, and different providers that they uniquely present to the communities through which they’re positioned.”

The FCC’s ruling on WPIX is one other signal of the Biden administration’s laborious line relating to mergers and acquisitions and media and tech regulation. It comes at a time of heightened rigidity for native broadcasters and the entire conventional TV panorama that’s fighting the business’s transition to digital. DirecTV, which has battled Nexstar within the latest previous over retransmission consent price negotiations, was fast to applaud the FCC’s transfer. Nexstar’s presence in New York makes the corporate a extra formidable negotiating associate with nationwide MVPDs akin to DirecTV.

“We applaud the FCC’s efforts to implement the media possession guidelines on relationships Nexstar has with sidecars like Mission Broadcasting,” DirecTV mentioned in a press release.