Broadcast blitz begins

The E.W. Scripps Company and Gray Media yesterday announced a small but significant deal to swap television stations in five local markets, forming rare duopoly ownership in several places.

🧪 Why it matters: The deal serves as a critical litmus test for understanding the resolve of FCC chair Brendan Carr around relaxing local broadcast ownership rules, Scripps president and CEO Adam Symson told Axios.

Between the lines: Broadcasters have gleefully awaited a major deregulatory blitz from President Trump's FCC that will allow more business-saving mergers, acquisitions and deals.

• But some of those relaxed rules won't be realized until they're tested through deals like the one announced by Scripps and Gray.
• While the first Trump administration relaxed some policies, many of the largest restrictions are still in place, Axios has reported.
• Most notably, no single entity can own more than one of the four largest stations in any single market.

🤝 State of play: Local broadcasters that were forced to sit on the sidelines of M&A chatter during the Biden administration are now actively engaged in deal talks.

• "I think when it became clear that the administration was going to take a different approach to the regulatory environment — particularly chairman Carr — many of us in leadership in the broadcast business started to sit down across from each other in what I can only describe as a very complicated game of 3D chess, identifying ways that we could do deals that would improve both parties," Symson said.
• While Scripps isn't currently in a position to do a large-scale acquisition, other firms with healthy balance sheets, like Tegna, are almost certainly eyeing deals.
• Apollo Global Management, which is looking to sell its majority stake in Cox Media Group, is currently eyeing bids from multiple suitors and could possibly sell off different station groups separately, two sources told Axios.

Flashback: In 2023, FCC regulators stopped hedge fund Standard General's $5.4 billion merger to buy Tegna, citing a violation of broadcast ownership overlap rules.

• Carr and Republican FCC Commissioner Nathan Simington criticized that decision.
• "At this moment, the FCC should be working to encourage more of the investment necessary for these local broadcasters to innovate and thrive. It does the opposite today. After a protracted, nearly yearlong review, the Commission should be providing the parties with a decision on the merits — not an uncertain future," they wrote.

The big picture: While broadcasters are largely optimistic about dealmaking during the Trump era, there are concerns that politics could get in the way.

• Paramount's historic settlement with President Trump last week serves as a reminder of how much political risk comes from airing news programs.
• Carr has also threatened to block media mergers based on corporate DEI policies.