WKBN/WYTV Joint Operations an Issue in $4.6B Merger
YOUNGSTOWN, Ohio – The joint sales agreement that enables WKBN-TV and WYTV-TV to share business and news operations appears to be an issue in whether the Federal Communications Commission will unconditionally approve the merger of Media General and Nexstar Broadcast Group.
Nexstar announced last month that it would pay $4.6 billion for Media General, which owns or serves 71 television stations in 48 markets. That includes WKBN, which it owns, and WYTV, which it operates through a joint sales agreement (JSA).
Nexstar, based in Irving, Texas, owns and operates 106 TV stations in 57 markets.
Nexstar wants the FCC to grant a “temporary waiver” through 2025 so it can maintain the Youngstown JSA as well as Media General’s shared services agreements in the Albany, N.Y., Augusta, Ga., Lansing, Mich., Topeka, Kan., and Springfield, Ohio, markets.
But last week the FCC denied the transfer of a JSA in the Wichita, Kan., market as part of its approval of Gray Television’s acquisition of Schurz Communications. As reported by TV NewsCheck, the regulatory agency’s rejection of the Wichita JSA sets “a precedent that Nexstar and Media General may not be able to get around.”
WKBN has gone through several changes of ownership since the founding Williamson family sold the TV station in 1997. The joint sales agreement to operate WYTV was signed in 2007. Their operations were merged at WKBN’s headquarters, 3930 Sunset Drive, and the WYTV building at 3900 Shady Run Road was vacated.
Media General, based in Richmond, Va., purchased WKBN and the WYTV JSA in 2012 as part of a $1.6 billion merger with Lin Media.
The FCC voted in March 2014 to prohibit new joint sales agreements, which essentially negate agency rules that forbid a single entity to own two TV stations in the nation’s largest markets, and ordered existing JSAs to unwind by the end of this year.
But in December, Congress overruled the FCC by attaching a rider to the federal appropriations bill that grandfathered JSAs through September 2025. The legislation did not address whether such agreements could be transferred to new owners. Would an ownership transfer constitute a new JSA, as barred by the FCC in the Gray/Schurz ruling, or should grandfathering protect such arrangements?
Ultimately, the final arbiter is Congress which, if political practice is a guide, is likely to protect Nexstar’s bid to keep the six JSAs Media General operates.
Nexstar describes the six JSAs as “incidental” to the merger agreement because the deal involves more than 175 TV stations. “Granting a temporary waiver to allow the legacy JSAs incidental to this transaction to continue to Sept. 30, 2025, will serve the public interest and is consistent with Congress’s directive,” Nexstar said.
Copyright 2024 The Business Journal, Youngstown, Ohio.
