The Federal Communications Commission has ordered Mission Broadcasting to sell WPIX New York and fined Nexstar Media Group more than $1.2 million because Nexstar has taken de facto control of the station in violation of agency rules.
The agency also ordered Mission to pay a forfeiture of $612,395 for rules violations, the maximum allowed.
“We find that Mission and Nexstar have committed apparent willful and repeated violations,” the FCC said.
Nexstar said it intends to dispute the ruling “vigorously.” Mission called the decision "unwarranted" and said it would also contest the ruling.
Nexstar, which has a financial interest in Mission, operates WPIX under a series of management agreements. The FCC said that because Nexstar programs the stations and collects its advertising and distribution revenue, it controls the station without approval. The arrangement also puts Nexstar over the 39% station ownership cap, which is why Nexstar opted to divest WPIX and WGN Chicago after buying Tribune Media in 2019.
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Mission has 12 months to either sell the station to an independent party or to Nexstar. If it sells to Nexstar, Nexstar must divest stations to get under the ownership cap, the FCC said.
“We are extremely disappointed in today’s action by the Federal Communication Commission regarding our relationship with WPIX-TV and we intend to dispute it vigorously,” said Nexstar CEO Perry Sook.
“We believe the FCC has been misled by the often distracting noise in the media ecosphere and that it has completely misjudged the facts,” Sook said.
Sook said Nexstar has complied with FCC regulations since Mission acquired WPIX in 2020. Nexstar divested WPIX after acquiring its parent company Tribune Broadcasting. Nexstar sold an option to buy the station to E.W. Scripps Co., and Mission later acquired the option.
Mission is the licensee for 29 full-power TV stations in 26 markets, and all of the stations are operated by or in conjunction with Nexstar through various agreements. New York is the only market where Mission operates and Nexstar doesn't, the FCC said, and therefore can't claim to gain benefits from sharing some service functions.
“Nexstar believes that joint operating, shared service, and local marketing agreements like those in which it is engaged are vitally important to maintain a competitive media marketplace and to enable broadcasters to continue investing in local news, investigative journalism, and other services that they uniquely provide to the communities in which they are located,” Sook said.
Dennis Thatcher, president of Mission Broadcasting, released a statement saying that the company has a near 28-year track record of owning TV stations with an unblemished record.
"We have prided ourselves on conducting our business in an open and transparent manner with the Federal Communications Commission and other governmental agencies. Mission was granted the license for WPIX-TV by a full vote of the F.C.C. in December 2020," Thatcher said. "We believe that this attempt at 'revisionist history' by this F.C.C. is unwarranted and we plan to contest this ruling to the full extent the law allows.”
Comcast urged the FCC to looking into Nexstar violating the ownership cap in 2021.
“After a thorough examination, the FCC found that Nexstar is in clear violation of FCC rules and orders, and controls WPIX," Comcast said Thursday. "We’d like to thank the Commission for correctly attributing the ownership of WPIX to Nexstar and ending the fiction that the station was ever independent once Mission became its licensee."
The FCC determined that "the Parties’ actions before, during, and after Mission’s acquisition of WPIX (the Acquisition) apparently resulted in Nexstar taking de facto control of WPIX, resulting in Nexstar and Mission violating section 310(d) of the Act through an unauthorized transfer of control. In addition, Nexstar apparently violated the ownership restrictions in section 73.3555(e) of the Rules by obtaining undisclosed cognizable attributable interests in WPIX without Commission authorization."
Commissioner Brendan Carr, in a concurring statement, noted that the FCC apparently uncovered information about Nexstar and Mission that wasn't known when the agency approved of Mission's buying WPIX. “Those FCC allegations will require careful review,” Carr said. “But it is concerning to me that the FCC cites as evidence of control those features of the relationship that the FCC previously signed off on. We need to be careful that we do not undermine reasonable reliance on prior FCC decisions.”
