Deadline has reported that the FCC has voted to remove caps on ownership of local stations. The FCC voted 2-1 in favor of abolishing the 39% limit on consolidation in any market. The FCC will likely face legal opposition. In addition, Congress can pass a law that would supersede any FCC doctrine.
FCC Chairman Brendan Carr has stated he believes the rapidly shifting media landscape has forced the move, believing that cable news was “going the way of newspapers.” Carr continued, “It is time to restore balance to the broadcast airwaves. Repealing the national cap will provide essential relief for local broadcasters by restoring a healthy counterbalance to the growing leverage of national programmers,” per Deadline.
Carr believes that limit had inhibited broadcasters’ ability to scale. In turn, this will boost advertising sales and revitalize local broadcasting.
Carr has been in several recent controversies over free speech concerns. He has clashed with Jimmy Kimmel (Smurfs, Deli Boys) and threatened to pull licenses over comments made about President Trump and the alleged shooter of Charlie Kirk. Additionally, he initiated an early review of ABC’s licenses over equal time rules on The View.
This ruling has been a long-time aspiration of broadcasting conglomerates. These companies have asserted that they are unable to compete with tech giants who have seemingly endless pockets and have consistently eaten into local broadcasting market share. This messaging is similar to some of the statements made by Paramount executives in defense of their merger with Warner Bros. Discovery.
Nexstar Media Group is one of the main proponents of the caps’ removal. The path is now clear for them to go forward with a merger with Tenga. While the merger has been approved, judge has instructed the company to keep assets separated while a lawsuit with DirecTV pertaining to the merger is settled. Nexstar was one of the broadcasters who refused to air Jimmy Kimmel after comments made about the alleged shooter of Charlie Kirk. Disney, ABC’s parent company, eventually suspended Kimmel. Kimmel was reinstated after calls to boycott Disney’s streaming platforms over free speech concerns.
The lone Democrat who voted on the removal of the cap, Anna Gomez, released a statement today. “The large station groups positioned to grow even larger under this decision are not local broadcasters; they are national companies that own local stations and increasingly dictate what airs on them. Trading a squeeze from Big Tech for a squeeze from Big Media does nothing to protect the communities this cap was designed to serve,” it read. She cautioned that continued centralization could lead to the cannibalization of companies’ own newsrooms.
Democrats were not the only ones who had doubts about the FCC vote. Republican Senator Ted Cruz is skeptical whether the FCC actually has the jurisdiction to repeal the limit as a statute and would lie with Congress. Tom Delay, the former House majority leader, wrote an op-ed for Daily Wire discussing his role in crafting the 39% cap. Newsmax CEO Chris Ruddy has threatened legal action against Congress, stating the broadcast television “is too important to be handed over to a small number of conglomerates,” via Deadline.
In opposition to the idea that the power to repeal the cap lies with Congress, the Carr-led FCC said Congress “has at times directed the Commission to change our rules; it has never withdrawn our authority under the Communications Act to regulate or change ownership limits,” per Deadline. The FCC believes that the 2004 legislation mentioned by Delay was only to “modify its rules.”
CEO of the Sinclair broadcasting group Chris Ripley also joined Nexstar in support of the repeal. “We fully expect people to challenge this order, and we think the FCC is on solid legal ground here in terms of their authority to change this rule and the rationale behind changing it. The FCC’s mandate is to deregulate over time. That was the mandate from Congress, as conditions change, and that’s what’s happening here,” he said on the earnings call Wednesday per Deadline Sinclair was the other broadcaster who also elected not to air Jimmy Kimmel Live! before his official suspension.
Deadline has reported that on Nexstar’s earnings call, CEO Perry Sook said the action “will remove a certain level of uncertainty in future M&A” and allow broadcasters to “compete on the same playing field in the domestic U.S. with every other purveyor of advertising, and every other purveyor of video that we compete with that has access to 100% of U.S. households.” He did note that the repeal may not have a substantial impact on its current lawsuit related to the Tenga merger as it is “more about antitrust than the national ownership cap.”
The repeal does not turn broadcast media completely into the wild west. Companies must still acquire FCC approval before a merger exceeding 39% is allowed to proceed. According to Deadline, there may be transactions that would have exceeded the limits of the 39% national cap that do not promote the public interest, and those will be denied. On the other hand, there may be transactions that would have exceeded the cap that do promote the public interest and could gain Commission approval,” the FCC said.
Daniel Suhr, president of the advocacy group Center for American Rights, said, “Today’s vote is a victory for local viewers fed up with left-wing news and formulaic entertainment from Hollywood and New York shoved down their throats by the national networks. Local broadcasters needed regulatory relief that allows them to compete with the networks and BigTech for quality programming and premium sports,” per Deadline
Two of the most prominent voices on the left spoke out on the move. According to Deadline, Gavin Newsom said that the action, “flagrantly flouts longstanding limits on media monopolies set by Congress. This will make it easier for Trump, through his proxies and toadies, to control what Americans see, hear, and read. This attack on independent, local news is straight out of a dictator’s playbook.”
Sen Elizabeth Warren has been vocal critic of the current state of media conglomeration. She called the repeal of the cap an attempt to “illegally rewrite the rules to make it easier for billionaires to line their own pockets while jacking up costs and controlling what Americans watch. After rubber-stamping the Nexstar-Tegna megamerger, this looks like the Trump administration’s latest attempt to roll out the red carpet for more antitrust disasters,” via Deadline