Chicago Radio: FCC Green Lights Nexstar-Tribune Deal

After nearly a century of broadcasting, WGN 720 AM will no longer be Chicago’s very own.

The Nexstar Media Group’s $4.1 billion purchase of Chicago-based Tribune Media was approved by the Federal Communications Commission Monday, creating the nation’s largest local TV station ownership group, and moving the corporate nexus to Texas. The deal is expected to close later this week, reports The Chicago Tribune.

In granting the merger, the FCC said viewers would benefit from combining the two giant media companies under the Nexstar corporate umbrella.

“The Commission found that the proposed merger would provide several public interest benefits to viewers of current Tribune and Nexstar stations,” the FCC said in a statement Monday. “For example, viewers would benefit from their local stations having increased access to Nexstar’s Washington, D.C., news bureau and state news bureaus.”

Nexstar, which launched just over 20 years ago with the purchase of a single TV station in Scranton, Pa., has grown into a broadcasting behemoth with 174 stations in mostly small and midsize markets across the U.S.

The acquisition of Tribune Media gives Nexstar both broadcasting history and major market heft, adding 42 TV stations including WGN-Ch. 9 in Chicago. The deal also includes cable channel WGN America and WGN 720 AM.

Nexstar Station map

Nexstar has agreed to sell 21 TV stations in 16 markets — including Tribune-owned WPIX-TV in New York — to comply with FCC and Department of Justice ownership restrictions. The company is planning to use the $1.36 billion in gross proceeds to help fund the Tribune acquisition and reduce debt.

“We’re very pleased with today’s decision by the FCC, which enables us to clear the last remaining regulatory hurdle in our path," Tribune Media’s CEO Peter Kern said in a statement. "We look forward to closing our transaction with Nexstar very soon.”

Nexstar agreed to buy Tribune in December with an all-cash offer that values the company at $46.50 a share. The total purchase price is $6.4 billion, including the assumption of debt.

The merger creates the largest TV station group in the U.S., unseating Maryland-based Sinclair Broadcast Group, which was forced to abandon its own takeover attempt for Tribune Media last year after the $3.9 billion transaction drew the ire of regulators.

While there have been no announced divestitures of any of the WGN properties, one change is certain — the deal pulls the plug on Tribune Media, a Chicago-based broadcasting empire with a national footprint and deep local roots.

The company’s broadcast portfolio started with WGN-AM, a pioneering radio station launched by Chicago Tribune publisher Col. Robert McCormick in March 1924, with the call letters standing for “World’s Greatest Newspaper.”

In 2014, Tribune Media spun off its legacy publishing division as Tribune Publishing, which owns the Chicago Tribune and other major daily newspapers.