FCC votes in favour of eliminating cap on TV station ownership in the US

The Federal Communications Commission (FCC) has voted to scrap a long-standing rule that prohibits TV station owners from reaching more than 39% of American households.

Brendan Carr

The government agency, which regulates TV, radio and cable communications in the US, on Thursday voted 2-1 in favour of repealing the cap, which has long been a bone of contention for station owners looking to bulk up.

FCC chairman Brendan Carr has repeatedly signalled his interest in removing the cap, claiming it has created challenging market conditions for local station owners looking to compete with national channels and streamers.

With the station-ownership limit removed, the FCC said it will instead review station mergers and acquisitions on a case-by-case basis.

While the move paves the way for more consolidation in the TV station space, Nexstar Media Group already completed a deal to acquire rival Tegna earlier this year in a US$6.2bn deal that puts the combined entity far above the 39% threshold.

However, that merger was frozen after DirecTV and a group of US states sued to block the deal. A federal judge issued a preliminary injunction preventing Nexstar and Tegna from integrating until after an antitrust trial, set to begin in July 2027.

The rule about market concentration has changed several times over the past four decades. In 1984, the FCC imposed a rule preventing broadcasters from owning more than 12 stations. In 1996, a rule was introduced to prevent station owners from reaching more than 25% of US households, with the cap subsequently being increased to 35% and then, in 2004, up to 39%.

Several TV station groups, including Nexstar and Sinclair, released statements applauding the removal of the cap.

A Nexstar spokesperson called it a “welcome, necessary and long-overdue recognition of today’s competitive landscape, which is dominated by legacy Big Media and Big Tech.”

“For too long, local broadcasters were handcuffed from reaching the scale they needed to compete on a more level playing field by outdated federal rules that didn’t apply to the largest and most powerful companies like Google’s YouTube, Meta’s Instagram or Netflix,” the rep added.

“Modernising these rules will help ensure broadcasters can continue investing in local journalism and providing the free, trusted news and information that communities across America rely on every day.”

Sinclair president and CEO Chris Ripley said revising the rules to “reflect dramatic changes across the media industry will set the stage for local broadcasters to begin to compete on a more level playing field,” adding that it will “give broadcasters a fighting chance to preserve local news and continue to serve their local communities.”