The Wall Street Journal originally broke the news that sources close to the deal reported two of the largest television broadcast companies, Nexstar and Tegna, may be in talks for a merger and acquisition. Tegna shares skyrocketed shortly after the news broke. With the FCC under the control of a Trump Administration loyalist, deregulation is inevitable. Aiming to loosen restrictions on how much power a single owner and operator can have over local TV stations, wins have already begun rolling in from appeals courts. This will open the door to a concentration of power in media ownership that may be necessary for survival in the dwindling legacy media landscape.

Media Post has reported the valuation of the deal to be around $2.5 billion. This is in stark comparison to the deal Tegna was working on a few years back between them and Standard General, which brought in a much higher valuation at $8.6 billion. The higher valuation was in part due to a bidding war leading up to the previous deal, which was a take-private deal. The current deal is reported to be an acquisition of a public company and reflects a much more sober market value. Talks between Tegna and Standard General stalled after the Biden Administration allegedly disapproved of the merger and the effects it could have on television station workers, such as triggering a mass layoff. The deal was sent to what is essentially an M&A graveyard when the previous FCC decided to hold public hearings for the merger.

Deadline confirms that TV station groups are looking to compete with streaming services, which are now being owned by fewer and fewer companies as power consolidates. The only way for them to remain competitive is to remove the antiquated TV station ownership cap. Eyes will be on the Nexstar and Tegna merger, as the number one and number four largest television station owners look to join forces to remain competitive. If the deal is a success, it is expected that many others will follow. After the appeals court ruling, Tegna CEO Mike Steib was quoted as to saying, “We believe deregulation is coming and will create significant opportunities.” He seems to allude to the possible merger: “We are open to being a buyer or seller, depending on the opportunities, and are disciplined in our approach.”

Neither party has commented publicly on the merger.