The proposed takeover of local station group Tegna by Nexstar, another leading local station group, is putting renewed focus on the future of local broadcast as Trump-appointed FCC Chairman Brendan Carr figures out just how far to take the administration’s urge to deregulate station ownership and what the potential fallout from those decisions might be.
Much hinges on a recent (July 2025) 8th Circuit decision that did away with restrictions the FCC had placed on the “Duopoly Rule” and how much of a green light Carr sees that as being for waylaying other restrictions on ownership, the 39% rule in particular.
For those of you not steeped in the arcana of U.S. local television rules, forthwith, a succinct explanation.
Why It Matters
As outlined in this LinkedIn post, the FCC, the government agency in charge of regulating television and other non-digital media, has long made it a priority to ensure that American media—broadcast TV in particular—was not controlled by a small cadre of owners as they believed that would ensure Americans had access to a wide variety of opinions.
While specifics have shifted over the years, current law puts a cap on ownership, stating that no single entity can own broadcast stations reaching over 39% of US households.
That is why the big networks only own a handful of stations (called O&Os, or owned-and-operated stations) concentrated in the major markets, while the rest of the stations carrying networks like CBS and NBC are affiliates, independently owned stations that have struck deals with the various networks.
Given the changing dynamics of the broadcast industry in the streaming era, there has unsurprisingly been a push to relax these rules.
The bigger station groups, who have been the ones pushing for this change, argue that the only way broadcast TV can survive in the streaming era is via the economies of scale created by allowing them to control more than 39% of US households. That this will allow them to aggregate national news and thus focus more on local stories.
Free speech advocates argue that this is not true, that local broadcast will survive by offering a diversity of voices and that allowing a single company to dominate local news is bad for democracy and that all consolidation will do is make local news worse, as it will stop being a priority.
To which the broadcast groups counter that in 2025, most people under 65 don’t get their news from local broadcast as it is and many under 30 get it from “news influencers” on TikTok who may or may not have ever taken a journalism class.
So there’s that.
Then there is the Duopoly Rule, which goes something like this:
Initially, no one entity could own more than one station in any given market.
This was changed not that long ago (2017) to allow for ownership of two stations in a single market provided that they were both not among the top four stations in that market.
That is in italics because it is important.
The top four stations in any US market will be the ones belonging to or affiliated with the Big Four networks: ABC, CBS, FOX or NBC.
So that second station would be a much smaller station, likely a UHF channel and the impact of owning it and one of the big guys was not considered to be much of a problem.
But here is where it gets tricky:
In the recent 8th Circuit ruling I mentioned earlier, Zimmer Radio vs FCC, the court threw out the “can’t be two of the top four” exception.
Boom!
That means a single entity can now own two of the top four stations in any given market.
But Alan, surely someone will appeal this case to the Supreme Court, right?
Not so fast, Bucko.
To begin with, the sides were reversed here.
The suit was filed in 2022 and so the FCC, which was controlled by Democrat Jessica Rosenworcel, was actually the defendant in this case. They were arguing in favor of keeping the cap.
The current, GOP-controlled FCC, under Brendan Carr, would likely have been the plaintiff, arguing against the cap.
Meaning they’re unlikely to appeal a decision that, in their mind, actually went their way.
That leaves a bunch of free-speech groups like the Prometheus Radio Project, Free Press and Common Cause who usually appeal these sorts of cases.
But not this time.
Without giving you a whole law school course, the only people who can file an appeal in a Federal Appeals Court case other than the actual plaintiffs and defendants is another category of participant called “Intervenors”, parties who have filed to be allowed to intervene in the case as they have an interest in the outcome.
Perhaps because the case was originally filed when the Democrats controlled the FCC, these free speech groups just assumed the FCC would appeal a decision against them.
Regardless, they only filed amicus briefs (“friend of the court”) which do not give them standing to appeal.
So who has standing?
Two trade groups, the NCTA and the ATVA, advocates for MVPDs.
Why them?
Because, the MVPDs argued, if a station group owned two of the major stations in a market, that would drastically lessen their ability to negotiate lower retrans fees, the money they pay to local broadcasters to retransmit their broadcast over cable.
So a largely self-interested economic argument (less competition = higher prices) rather than a free speech one, albeit spun with a pro-consumer twist. (Lower retrans fees = lower cable bills.)
Which leaves us where we are now: will the NCTA and ATVA step up and appeal?
There will be pressure on them from both sides.
They will need to weigh the potential political and PR fallout in our current highly charged environment with their desire to pay lower retrans fees. Appealing the decision will be costly too: will their members be willing to cough up the dough? Will they be pressured by the free speech groups? Will a wealthy free speech advocate (someone like Mackenzie Scott) help fund that appeal, possibly making the decision easier? Are the MVPDs thinking that since it’s open season on station ownership, maybe they should pick some up while the going is good and not bother to appeal?
Too soon to tell.
So how does this all affect the Nexstar/Tegna deal?
First off, there are a lot of cities—35, to be exact—where Tegna and Nexstar overlap. They can now rely on the 8th Circuit ruling to not GAF about that.
Only there is still the pesky issue that between them, the two groups will own stations reaching around 80% of US households.
Which is double the 39% limit and then some.
So they’re going to be hoping that Trump-appointed FCC Chair Brendan Carr looks at the court’s direction in Zimmer Radio and decides that gives him permission to do away with the 39% limit.
Given that he’s already indicated that he is open to it by seeking public comment on whether to “modify, retain or eliminate" the 39% rule, this seems like a fair enough assumption.
So there’s that, and if it happens, we are likely to see a local broadcast gold rush among the various station groups and, quite likely others, everyone from tech companies to private equity.
Yee hah!
What You Need To Do About It
If you are the FCC, Chairman Carr in particular, you need to weigh the value of maintaining a free and fair press with the likelihood the broadcast television arm of that free and fair press might not survive the streaming era.
As always, there are lots of shades of gray here, and lots of people who see things as black and white.
I’m not going to write your decisions for you, but I would like to remind you that this is not an all-or-nothing situation, that you can relax some restrictions while still ensuring that local news coverage remains fair and balanced.
It just requires a bit more thinking.
If you are following this story, remember that none of this is happening overnight, that, if nothing else, it will be a good year before the deal is finalized and that a lot can happen in a year.
If you are a local station group owner, be aware that the gold rush is likely coming, that if Carr does away with the 39% rule, all bets are off and some of your properties will be worth a lot, some will be worth a little and you’ll need to determine whether it makes sense to be an acquirer or an acquisition. And if the former, whether the juice is worth the proverbial squeeze.
You’ll also want to weigh the value of avoiding either of those routes and just going it alone, without any network affiliation. This may well be the best path forward as Tim Hanlon outlines in his TVREV Proximity column this week.
If you are Congress, consider that the state of local broadcast is likely such that your intervention is warranted in order to ensure most stations can stay afloat.
This is a much bigger conversation than many of you are ready to have, and the current administration’s attitude towards NPR seems to indicate it does not have much love for public media in smaller markets, but I do think that is ultimately where we will wind up.
Something needs to be done to preserve local media and local news outside of major markets where the economics of our digital age often makes broadcast TV and radio financially unattractive.
Remember too that “news” doesn’t have to be political, much as keyboard warriors will try.
There’s a potential flood coming so be careful on the roads; the town is having a Fourth of July carnival; there’s a new rec program for seniors—those all count as “news” too.
If you are Nexstar, be PR-savvy. Very PR-savvy. You don’t want the deal to blow up, so whether you believe it or not, make soft purring noises about free speech and diversity of opinions and the importance of local media.
If you are a streaming service, or a media company with a streaming service, consider how all this affects you. Or if it even affects you.
You may decide that broadcast is already too far gone for saving. Or you might decide that there’s still value there in terms of both ad revenue and distribution, and you want in.
Either way, it makes sense not to ignore it.
If you want to keep up with everything that’s going on with local, make sure to check out TVREV’s upcoming Special Report on Local TV, out next month, as well as our weekly Proximity column.
Alan Wolk is co-founder and lead analyst at the consulting firm TV[R]EV. He is the author of the best-selling industry primer, Over The Top: How The Internet Is (Slowly But Surely) Changing The Television Industry. Wolk frequently speaks about changes in the television industry, both at conferences and to anyone who’ll listen.
Week in Review is an opinion column. It does not necessarily represent the opinions of StreamTV Insider.