A regional television merger between Nexstar Media Group (NASDAQ:NXST) and Tegna Inc (NYSE:TGNA) gained attention during the decision by Walt Disney Co (NYSE:DIS) to suspend Jimmy Kimmel from his late-night talk show.
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The merger is now back in the spotlight with an ally of President Donald Trump speaking out in opposition to the deal and potentially taking on FCC Chairman Brendan Carr, who Trump appointed to the role.
What Happened: Support from FCC Chairman Carr for a potential combination of the companies could be one of the reasons why Nexstar decided to not air "Jimmy Kimmel Live!" after the host made comments about the death of Charlie Kirk.
Carr said that Kimmel should face punishment ahead of his suspension by Disney during an appearance on a podcast. Before Disney announced a full suspension, Nexstar was prepared not to air the show. The media company would go on to not air Kimmel's immediate return as well.
While Nexstar could have been trying to gain favor with Carr to get its merger approved, it could be facing a new level of opposition.
Newsmax Inc (NYSE:NMAX) CEO Chris Ruddy, who leads the recently public news company, is against a key rule change that could lead to the merger being approved.
"This is about, first and foremost having competition so that three or four companies don't own all the TV licenses, all the major licenses across the country," Ruddy said, as reported by the New York Post.
To get the merger approved, a key FCC rule that says no single company can own local TV stations that reach more than 39% of U.S. households needs to be changed. Carr has voiced support to end the rule saying it provides "arcane artificial limits" on TV station ownership and could keep local news outlets from better competing against the likes of YouTube.
Antitrust groups are against the merger that could see one company have access to 80% of U.S. households.
Read Also: Disney’s $17 Million Monthly Loss: How Jimmy Kimmel Suspension Impacts Streaming Revenue
Ruddy's Argument: Ruddy, a known ally of Trump, said he's against lifting the 39% cap as it could lead to "left-leaning broadcast networks" later gaining too much power.
Ruddy is arguing that the FCC can not overturn the 39% rule that was previously ratified by Congress and would need Congressional support to make a change.
The Newsmax CEO said the efforts to overturn the rule have "very little support in Congress."
"The Democrats are all opposed to this merger and the 39% cap," Ruddy said. "And every Republican, I've spoken to, I've never heard somebody say that this is a good idea."
According to the report, Ruddy has a history of "being able to speak to Trump," which could create a conflict between the ally of the president and the FCC chairman.
Carr has pushed for deregulation in the TV and radio spaces and also pushed for companies to be fair in their political programming.
Ruddy has drawn both support from Republicans for his cause and some opposition who believe he could be looking out for his personal interests as the owner of Newsmax.
The Newsmax owner said the combined company could hurt independent programmers such as his company.
"I'm fighting for Newsmax's life, dealing with these big companies. They're trying to squish us," Ruddy said.
In September, Carr said no "final decision" has been made in removing the limitations, while also speaking out against Newsmax's argument. Carr said Newsmax has no limit on how many households it can reach, making its argument carry less weight.
The Nexstar and Tegna merger, if approved, could still result in the Department of Justice making stipulations on the combined company selling off stations to lower its overall reach.
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