Have Nexstar and Sinclair station groups stirred up their hands by actively trying with Disney this week? The decision to yank “Jimmy Kimmel Live” from ABC’s affiliates combines 25% of television viewers, and could affect several aspects, including the relationship between Disney and these two station groups, as well as the ongoing debate over the loosening or elimination of ownership of television stations across the country.
Nexstar is considering getting fellow station group Tegna in a $6.2 billion deal, and many insiders in the broadcast believe the company’s decision to take precedence over Kimmel (which led to his show being benched by ABC Parent Disney) has been given curry favor by the Federal Communications Commission to approve the purchase. The Nexstar/Tegna combo places a company that consolidates current legal limits on the number of local stations that one entity can own. That’s why Nexstar and other broadcasters are pushing hard by the FCC to abolish that rules. As is known in broadcast terminology, “station cap” is set to reach a total of 39% of US television households. The broadcasting station hopes that the FCC will either completely eliminate station caps or lift them to over 50%.
Nexstar denies that the move at Kimmel, which spurred the ABC decision, is politically motivated by the parent company. “‘Jimmy Kimmel Live!” was unilaterally created by a senior Nexstar team of senior executives, and there was no communication with the FCC or government agencies before making that decision,” Nexstar said in a statement Thursday. But nonetheless, the announcement of Nexstar was made only after FCC Chairman Brendan Carr appeared on the podcast and heavily criticised Kimmel and ABC. The seemingly coordinated campaign of fury against Kimmel began to be built in right-wing media circles on Monday night and Tuesday after Kimmel’s September 15th show.
Meanwhile, Sinclair Broadcast Group also has business with FCC. Like Nexstar, the company wants to expand if ownership is lifted. Additionally, it is pushing harder to the new ATSC 3.0 standard, which can monetize the spectrum. (Sinclair, who has traditionally defended conservative perspectives and commentators, took the line more difficult than Kimmel’s Nexter, demanding an apology from the host and a donation to Charlie Kirk’s Turning Point USA organization.) Sinclair did not respond to requests for comment.
In addition to the question of whether Nexstar and Sinclair are FCC-enabled, the announcement of Nexstar and Sinclair is also brought about by the recent rise in relations between the broadcast network and its affiliates.
Local TV outlets receive retransmission payments from cable and satellite operators, and the network receives those retarded cuts. (Money sent to the network is called “reverse compensation,” because only once the network was used to pay affiliates to carry the lineup.
However, affiliates grew with concern that the network was demanding its retaliation money too much. Currently, most stations pay a fixed fee to the network for the right to carry fares (including sports), but they are looking for a more variable payment model in the network as local stations receive less payments from pay TV distributors.
At the FCC, Carr quickly highlighted the growing tension between the national networking business that accompanies the media giant and the interests of local station owners.
Did Nexstar/Sinclair Gambit work? I’m probably grateful to Nexstar on social media for “doing the right thing” and that it seems to have placed the company in the good bounty of the FCC. This administration is likely to lift or raise the ownership cap. Now that Nexstar and Sinclair have found favors for Carr and Trump, it’s probably a completed deal.
However, this week’s event also went straight in the middle of a nationwide conversation between Nexstar and Sinclair about free speech and the First Amendment. And many people who have never heard of these companies before are seen as opponents of the free speech debate. That could lead to more pushbacks from the public, guilds, unions and other entities who could actively fight the idea of abolishing station caps. “I think they’ll hear from a lot of groups that don’t usually speak up,” says one observer. (Ironically, Nexstar owns News Nation, a news network.
The majority of the TV stations are owned by a handful of broadcast television giants, including Nexuster, Sinclair, Hearst, Scripps, Gray TVs and Teguna. Nexter is a group that fears the local TV monopoly, which has been exacerbated by Kimmel suspension this week, and fears the local TV monopoly.
Meanwhile, should “Jimmy Kimmel Live” return to their Nexstar and Sinclair ABC affiliates? While Nexstar and Sinclair may hate getting the show back, executives familiar with network/affiliate relationships say there is a lot of potential for ABC to keep “Jimmy Kimmel Live.” For one thing, the network can bring Kimmel back to the schedule without the blessings of those station groups and move forward with, “And look at what those people are doing.”
For ABC, if some of its affiliates give up “Jimmy Kimmel Live” forever, there are several other options to bridge the audience gap. First, in this digital age, the majority of the audience have already caught Kimmel and his monologues via social media. Also, “Jimmy Kimmel Live” is streamed on Hulu, and audiences in the Nexstar/Sinclair ABC market can always find him. And you may be considering competitors in the Nexstar/Sinclair market (as there’s a lot of interest in Kimmel’s return), and perhaps you’re looking to break into Disney yourself.
The preemption of local stations on network fares is nothing new. In 1993, 57 ABC affiliates (mainly in small and medium-sized markets) refused to air the premiere of Alphabet Network’s “NYPD Blue,” citing concerns about the content. Instead, ABC cleared the show with a mix of independent Fox Stations in those cities. When “NYPD Blue” became a huge hit, they were given holdouts of those ABC affiliates and added the show to their lineup. Similarly, it took a long time to fully secure the national clearance for “Late Show with David Letterman” when CBS first launched, but Eye Network circumvented it.
Is the network/affiliate relationship between them and Disney already tense? If Nexstar and Sinclair refuse “Jimmy Kimmel Live” (or “The View”) forever, will it collapse?
After all, if Nexstar and Sinclair refuse to clear some of ABC’s flagship shows, it will definitely affect affiliate updates. It could be that other stations are waiting to take over on the wing. Most affiliate contracts are three-year deals, and media reports speculate that Disney’s ABC partnership deal is thought to be happening at the end of 2026 with both Nexstar and Sinclair.
Losing ABC affiliation will be a hit for Nexstar and Sinclair. This requires you to find exchange programming (or extend local news offerings at those stations). But when those companies get hope and successfully run a station cap lift, they can further expand their national reach – and as proven this week, it can cause a headache for traditional broadcast networks.
If station groups grow in power and demand programming changes from networks like ABC, that could be a turning point. Broadcasting networks that have been irritated by flirting about getting out of linear business for a long time could accelerate such plans. In 2023, Disney’s Bob Iger suggested that linear networks “may not be Disney’s centre,” suggesting that its broadcast and cable assets could ultimately be sold. Earlier this year, Igar betrayed these comments and threw his support behind his retention to Linear. However, the breakdown of transactions with affiliate marketing could reverse that. Already, many ABC viewers are actually taking place on Hulu (or ESPN, for Monday Night Football).
“The idea of sending towers to receivers when KABC in Los Angeles can put programming on the internet is a rather outdated idea,” said a longtime network executive. (And in fact, KABC, like most local TV stations today, is already mimicking all newscasts on the app at the same time.)
“Tracing this path could have unintended consequences for broadcast station groups sedimented by the federal government,” he added. “But I think there are many options for companies like Disney. Bob Iger said a few years ago that linear networks are not part of their core business. So station groups are not in any way human land.
“In terms of liberation from affiliate marketing, Disney has been able to find other ways (to popularize ABC programming). At this point, broadcast television ratings have never been lowered, and events like this can cause a paradigm shift.”
