Regulations Complicate Potential CMG Acquisition

Potential buyers of Cox Media Group (CMG) face several regulatory challenges, primarily stemming from U.S. Federal Communications Commission (FCC) rules on media ownership. These hurdles could complicate or delay a sale, such as the one Apollo Global Management is exploring, reportedly valuing CMG at around $4 billion as of March 2025. Here’s a breakdown of the key issues:

Ownership Caps and Market Concentration: The FCC imposes limits on how many TV and radio stations a single entity can own, both nationally and within specific markets. For television, a company can’t reach more than 39% of U.S. households with its stations, adjusted for UHF stations counting at half their reach. 

Radio rules cap ownership at eight stations in the largest markets (with at least 45 stations), dropping to fewer in smaller ones. Potential buyers like Nexstar Media Group or Gray Media, already major players, might bump up against these limits. For instance, Nexstar owns 200 TV stations, and Gray has 180—adding CMG’s 14 TV and 50 radio stations across multiple markets could push them over the edge unless they divest assets. Overlap in markets like Atlanta or Dayton could force sales of existing stations to comply, adding cost and complexity.

Cross-Ownership Restrictions: The FCC’s newspaper-broadcast cross-ownership rule, reinstated in 2019 after a court decision, bans one company from owning a daily newspaper and a TV or radio station in the same market. CMG’s Ohio properties—WHIO-TV, radio stations, and the Dayton Daily News—pose a problem here. 

Cox Enterprises historically held these under a grandfathered exemption, but that doesn’t transfer to a new owner. When Apollo bought CMG in 2019, it proposed reducing the newspapers’ print frequency to three days a week to skirt the “daily” definition, with Cox retaining an option to repurchase them. A new buyer might need a similar workaround or face divestitures, especially if they already own media in those markets.

Pending Deregulation Uncertainty: The appointment of Brendan Carr as FCC chairman under the Trump administration, starting January 2025, signals potential deregulation. Carr favors relaxing ownership caps, which could ease a sale by allowing bigger consolidations. Industry watchers, like Bloomberg Intelligence, suggest this could spark a wave of mergers. However, as of March 24, 2025, no concrete changes have been enacted, leaving buyers in limbo. If deregulation lags, they’ll navigate the current strict rules; if it comes mid-process, it could shift deal terms or invite more bidders, complicating negotiations.

Divestiture Requirements: Past CMG deals highlight divestiture risks. In 2019, Apollo had to sell stations in Tampa and Orlando to meet FCC limits when combining CMG with Northwest Broadcasting. A new buyer might face similar mandates, especially in overlapping markets. For example, Nexstar or Gray, with dense regional portfolios, might need to offload stations in places like Pittsburgh or Charlotte, where CMG also operates. This not only trims the deal’s value but also risks antitrust scrutiny from the Department of Justice if market dominance spikes.

These challenges aren’t insurmountable, but they demand strategic planning. Buyers might lobby for waivers, propose divestitures upfront, or bet on deregulation easing the path. The process could stretch months, as seen with Apollo’s 2019 acquisition, approved only after FCC conditions were met by November that year. For now, the regulatory landscape remains a tightrope, balancing legacy rules against a deregulatory horizon that’s tantalizingly close but not yet here.