Nexstar intends to divest TV stations to comply with regulatory ownership limits and also might sell other non-core assets.
The rapidly-growing Nexstar outbid private equity firm Apollo Global Management LLC, a person familiar with the transaction told Bloomberg News, in the new round of bidding that came about when Sinclair Broadcast Group Inc. was forced to abandon its takeover attempt. That $3.9 billion transaction drew the ire of regulators.
Bulking up will give Nexstar more leverage as it negotiates retransmission fees from pay-TV providers. Broadcasting companies also are pairing up in the hopes that their size will help ward off a threat from Netflix Inc. and other streaming services.
“One of the responses we’ve seen across the media landscape has been consolidation,” said Paul Sweeney, an analyst at Bloomberg Intelligence. “Let’s get bigger. Let’s get scale. Let’s respond to some of these technology media companies.”
This marks the second major deal among broadcast-station owners in 2018. In June, Gray Television Inc. agreed to buy Raycom Media Inc. for $3.65 billion.
In acquiring Tribune, Nexstar may be able to sidestep the regulatory problems that Sinclair faced, according to Bloomberg Intelligence’s Sweeney.
“Nexstar has a very longstanding, positive relationship with the FCC,” he said.
Bloomberg contributed to this story.