Today in "business strategies that sound suspiciously like rearranging deck chairs on the Titanic..."

Nexstar is coughing up $3.54 billion in cash and IOUs to swallow Tegna, the sad sack of regional television. Why? Because Nexstar wants to cement itself as the bloated king of regional media, a monopoly stitched together from car-dealer ad money, opioid crisis coverage, and that nightly 30 seconds of “viral TikTok trends” they still think will save them.

(Source: Giphy) 

In short, the deal puts Nexstar in nine of the top ten U.S. markets, giving it a theoretical audience covering 80% of American households. Translation: if you thought your mom’s obsession with the weatherman was bad before, wait until Nexstar owns the guy. Whereas, once the dust settles, Nexstar will control or service 265 stations across 44 states. Bigly. 

(Source: CNBC) 

Translation: This is deregulation, brought to you by Donnie Politics. And Perry Sook, Nexstar's CEO, is giving credit where credit is due. He’s openly praising Trump’s FCC and its deregulatory bent, which is essentially a hall pass for consolidation. Without it, this deal doesn’t even make it out of committee. With it, Nexstar gets to compete with Google and Meta for advertising while still running “local” broadcasts that now look a lot like a national syndicate wearing small-town drag.

And now, investors are betting the Trump-friendly FCC waves it through, and Tegna shares are trading like it. For instance, Tegna’s been front-running takeover rumors for weeks, mooning 27% this month, and an additional 3% pop upon the news. 

(Source: Giphy) 

As for the math, well… unlike Anglo American’s failed buyout, it shakes out. Nexstar is offering $22 per share, which is a 44% premium over Tegna’s pre-rumor close… with an enterprise value of $6.2 billion (with debt included). Additionally, we have $300 million in “synergies”, which really just means firing newsroom staff and replacing them with weather maps and syndicated garbage. Oh, and if Tegna backs out, it’s a $120 million fee. But if regulators kill it: Nexstar pays $125 million. Everyone’s lawyer wins either way.

Now, if you’re still scratching your head over a $3.54 billion deal over “Local TV”... you’re not alone. What’s actually being built here is less powerhouse, more hospice. Nexstar isn’t inventing anything new; it’s embalming a dying medium at scale. This is television taxidermy… taking the last viable ad dollars left in local news and pinning them to the wall before Big Tech drains the room entirely.

(Source: Giphy) 

But, but, but… in the short term, it works. Advertisers still need the reach, and Nexstar can now price-gouge at scale. Investors don’t care if the product is ambulance-chasing trash segments about fentanyl overdoses and the occasional substitute teacher scandal. They care that Nexstar just bought themselves negotiating leverage over every distributor and marketer in the country.

Meaning, while Netflix bleeds cash producing prestige dramas no one finishes, Nexstar just stitched together the nation’s largest network of “your local news team” and turned it into a rent-seeking machine. And you bet your a$$ they are going to milk it for all it’s worth. So yeah… big moves are happening, and even though Nexstar is down -2.64% on the day, it might be worth watching… especially once investors start seeing the money printer roll in from it. Until next time, friends… 

At the time of publishing, Stocks.News holds positions in Google, Meta, and Netflix as mentioned in the article.