Nexstar Stock Jumps on Report of FCC Plan to Scrap Broadcast Ownership Cap

Shares of Nexstar Media Group (NASDAQ:NXST) climbed more than 5% on Wednesday following a report that the Federal Communications Commission (FCC) is preparing to eliminate its national broadcast audience cap.

Reported Regulatory Repeal

According to a report from Bloomberg, the FCC is set to repeal the rule that has historically limited a single broadcast company from reaching more than 39% of television-viewing households in the United States. The move would represent a significant deregulation of the broadcast television industry.

The report, citing people familiar with the matter, stated that FCC Chairman Brendan Carr is expected to formally announce the policy change. The broadcast industry has long argued for the removal of such anti-consolidation rules, citing intense competition from largely unregulated streaming services and social media platforms.

Implications for Nexstar-Tegna Merger

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The potential rule change is particularly significant for Nexstar's acquisition of rival broadcaster Tegna Inc. The combination of the two companies would create a media entity reaching approximately 80% of U.S. households, a figure well above the current cap.

While the FCC suspended the rule on a case-by-case basis to approve the transaction earlier this year, a permanent repeal could bolster Nexstar's position in an ongoing legal battle. The merger faces antitrust claims from a bipartisan group of state attorneys general and DirecTV, who have secured a court order to halt integration efforts pending a trial scheduled for next summer.

Industry Context and Opposition

A legal debate remains over whether the FCC can unilaterally eliminate the ownership cap or if such a change requires an act of Congress. The move to relax ownership limits is opposed by various public-interest organizations, labor groups, and rival media outlets like Newsmax Inc., who argue it could harm media diversity and competition.