Nexstar Media Group (NXST) jumped as much as 8.75% on Wednesday after Bloomberg reported the Federal Communications Commission is preparing to scrap its national broadcast audience cap.
Nexstar Media Group, Inc., NXST
The stock had been up around 5% earlier in the session before extending gains as the story spread.
FCC Chairman Brendan Carr is expected to announce the change through a Breitbart op-ed on Tuesday morning and speak about it at a policy summit in Washington, according to people familiar with the matter.
The rule being removed previously capped how many TV-viewing households a single broadcaster could reach across the country.
The timing matters for Nexstar because the cap has been a central issue in its planned acquisition of rival broadcaster Tegna.
Together, Nexstar and Tegna would reach roughly 80% of U.S. households — well above the previous 39% limit that had been in place.
The FCC had already suspended the cap on a case-by-case basis when it approved the Nexstar-Tegna deal earlier this year. Repealing it entirely removes that uncertainty.
The deal is not without complications. A bipartisan group of state attorneys general, joined by satellite TV company DirecTV, went to court and won a temporary stop to integration efforts while they pursue antitrust claims.
A trial related to those claims is scheduled to begin next summer.
The legal fight could also spill into whether the FCC even has the authority to remove the cap on its own, or whether that requires an act of Congress. Public-interest groups, labor organizations, and Newsmax Inc. have all pushed back on relaxing the limits.
So while the regulatory picture is improving for Nexstar, the courtroom battle is still very much alive.
Broadcasters have been pushing for relief from anti-consolidation rules for years, arguing the old framework no longer reflects how people actually consume media.
The rise of unregulated streaming platforms and social media has shifted the competitive landscape, and broadcasters say the cap puts them at a disadvantage.
Nexstar’s year-to-date performance heading into Wednesday was down 12.02%, making the jump on this news a meaningful single-day move for the stock.
Average daily trading volume for NXST sits around 390,037. The stock carries a current market cap of approximately $5.36 billion.
The technical sentiment signal for NXST is listed as a Buy ahead of today’s move.
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