The $6.2B deal that could reshape local TV in Indianapolis and across America

TV watchers in Indianapolis might soon flip through the local news channels and find three of them owned and their broadcasts produced by the same company.

Nexstar, the largest TV station owner in the United States, already owns two of the city’s top stations: Fox affiliate WXIN-TV Channel 59 and CBS affiliate WTTV-TV Channel 4. Under a proposed deal to buy a smaller rival, Tegna, it would own NBC affiliate WTHR-TV Channel 13, too.

If approved, the merger also would concentrate ownership in Tampa and New Orleans. The likely result, said Jim Shella, a longtime Indianapolis broadcaster who worked at locally owned WISH-TV Channel 8 for 34 years before retiring in 2016, would be “fewer people covering the news and less meaningful coverage taking place.”

The Trump administration appears set to approve the deal, altering regulations in a way that would change how many Americans around the country get their news.

Indianapolis’s TV scene is already tight quarters. Nexstar’s CBS and Fox affiliates share some reporting staff and have the same news director, CJ Hoyt, who wrote in a LinkedIn post that the deal was “designed to give Nexstar a national reach to compete against digital giants who don’t face the same kind of restrictive regulations currently strangling local TV station owners.”

“Change is coming to our industry,” Hoyt wrote, “and I’m glad I’m with a company that’s strategically growing.” The market, meanwhile, faces challenges: Nexstar is pursuing the merger after viewership of local evening news programs dropped by about 25 percent between 2016 and 2023, according to Pew Research Center.

For such a big change to come to Indianapolis and other local television markets, the Federal Communications Commission will first need to lift some long-held prohibitions on how many stations one company can own in a given market and across the country.

The proposed $6.2 billion merger would probably be illegal under current FCC regulations. In its most recent annual report to shareholders, Nexstar said it reaches approximately 39 percent of national households, putting it right at the ownership cap that has governed nationwide TV station ownership for decades.

Combining with Tegna would push it well over that limit: In a press release, Nexstar said the deal would give it a total of 265 stations in 44 states plus the District of Columbia, reaching 80 percent of national households. The deal could also violate existing limits on local ownership in markets beyond Indianapolis.

Nexstar has expressed confidence that those rules will change. “The initiatives being pursued by the Trump administration offer local broadcasters the opportunity to expand reach, level the playing field, and compete more effectively with the Big Tech and legacy Big Media companies,” Nexstar CEO Perry Sook said in announcing the deal Tuesday. Nexstar and Tegna did not respond to requests for comment.

Indeed, Brendan Carr, the FCC’s Trump-appointed chairman, has long advocated loosening industry restrictions, referring to the ownership rules as “arcane artificial limits” during an interview at the Milken Institute in May. In June, the agency initiated a process to “refresh the record” on the national ownership cap—setting the stage for exactly this kind of merger.

Since June, Carr has enjoyed a 2-1 Republican majority on what is typically a five-person commission. He also scored a win in federal court in July when a three-judge panel vacated a rule that prohibits one entity from owning two of the four most-watched stations in a given market without a public interest exemption, though the court delayed its ruling from taking effect for 90 days.

The ownership rules were designed to preserve diversity of viewpoints and prevent any single entity from dominating local news and information. The national ownership cap was most recently set to 39 percent by Congress in 2004, with a requirement to reassess ownership rules every four years.

“The spectrum was given to broadcasters not for the purpose of making them rich, but for the purpose of providing public service,” said Tom Wheeler, who was FCC chairman under President Barack Obama. He said the Nexstar deal was announced “on the assumption that the Trump administration FCC will turn around and change those rules to allow it to happen.”

Michael Copps, a Democratic FCC commissioner from 2001 to 2011, also opposes the deal and looser ownership limits. “It’s bad for business, it’s bad for the public interest, it’s bad for news, it’s bad for an informed electorate, and it’s bad for democracy,” he said.

Industry advocates say the decades-old rules no longer make sense in an era when tech giants such as Google and Facebook take home inordinate amounts of advertising revenue.

“I think it’s definitely ripe for modernization,” said Evan Swarztrauber, senior fellow at the Foundation for American Innovation, a center-right think tank based in San Francisco. Swarztrauber, a former policy adviser for both Carr and the last Republican chairman, Ajit Pai, favors doing away with ownership restrictions and letting antitrust enforcers, rather than the FCC, police any competition issues. “The Justice Department is perfectly capable of handling antitrust concerns,” he added.

The proposed merger reflects an economic reality, said Rick Ducey, managing director at the media consultancy BIA Advisory Services. “The competitive environment has gotten tougher and tougher” for broadcasters, he said, while “Google and Facebook can own as much as they want, they can be as national as they want.”

It is unclear whether the FCC has the authority to change the ownership cap without Congress passing a new law, but Carr appears poised to try.

David Burns, an attorney who chairs the media practice group at the law firm Lerman Senter, believes the FCC may have the authority, but he expects immediate pushback. “If the FCC changes the cap, that will be challenged by the public interest groups in court,” he said.

Consumer advocates warn that consolidation will drive up costs for viewers. Grant Spellmeyer of ACA Connects, which is representing smaller cable companies, pointed to Nexstar’s explosive growth in retransmission fees that cable companies pay local station owners— from $298 million in 2015 to $2.9 billion in 2024. He said consumers are losing out amid a “doom cycle” of “ever increasing prices and dropping eyeballs,” adding that his group would consider suing if the ownership rules change.

Journalism unions and advocacy groups also oppose any regulatory changes to accommodate the merger. In a joint Aug. 4 letter to the FCC, several of them wrote that relaxing the national ownership cap would lead to intense industry consolidation and job losses for journalists. “There’s no evidence to suggest that the creation of massive news- and broadcast-media cartels will improve journalism or safeguard a free press,” they wrote. “In fact, the opposite appears to be true.”