Media Merger Mania
On Friday afternoon, after the market closed, news broke that Nexstar Media NXST 0.00%↑ was in advanced discussions to acquire TEGNA Inc. TGNA 0.00%↑. Once news broke, TEGNA’s stock price rocketed up 30% in after hours trading.
Over the past year I have written countless articles and posted many tweets why television broadcasters will end up combining, seeing multiples re-rating and attract outside capital. In one of my last articles, I highlighted TEGNA as a top position in my portfolio.
The new FCC Chairman, Brendan Carr is pro deregulation.
Deregulation in the broadcast industry will spark a wave of M&A we haven’t seen in decades.
Well capitalized players will acquire as many stations as possible from the less well capitalized as incremental margins are 30-50% from cost cutting surgeries.
The industry will eventually consolidate to 1-2 big players, and the FCC, for the first time, will potentially allow this event to happen.
Broadcasters remain in value territory, trading at 4-5x EBITDA.
Owning a basket of broadcasters could potentially result in portfolio outperformance.
Since Brendan Carr has taken his seat at the head of the FCC, the wave of M&A has started, and is only likely to continue.
Here are a few events that have already transpired:
Gray Media:
Acquired KXLT-TV (FOX, Rochester, MN) from SagamoreHill — FCC granted waiver & approved March; closed late March.
Announced acquisition of WLTZ (NBC, Columbus, GA) and KJTV (FOX, Lubbock, TX) — July 31; pending FCC approval.
Announced purchase of Block Communications stations — $80M for WDRB (FOX) & WBKI (CW) Louisville, WAND (NBC) Springfield/Champaign/Decatur, WLIO (NBC) Lima + LPTVs — August 1; closing expected Q4.
Announced station swap with E.W. Scripps — July 7; Gray gets WSYM (FOX) Lansing & KATC (ABC) Lafayette; Scripps gets KKTV (CBS) Colorado Springs, KKCO (NBC) & KJCT-LP (ABC) Grand Junction, KMVT (CBS) & KSVT-LD (FOX) Twin Falls — closing expected Q4.
Announced acquisition of 10 Allen Media Group stations — $171M; adds Columbus-Tupelo, MS; Terre Haute, IN; West Lafayette, IN; creates new duopolies in seven other markets — August 8; expected Q4 close.
Nexstar Media Group
In advanced talks to acquire TEGNA — reported August 8; no signed deal yet; terms undisclosed.
Rincon Broadcasting Group
Closed $29.4M purchase from Sinclair of WVTV (Milwaukee), WICD & WICS (Champaign–Springfield–Decatur), KHQA (Quincy/Hannibal/Keokuk), KTVO (Ottumwa/Kirksville).
Closed acquisition from Imagicomm Communications of KAYU (Spokane), KFFX (Pendleton), KCYU (Yakima), KYMA (Yuma), KOKI & KMYT (Tulsa), WHBQ (Memphis).
Sinclair Broadcast Group
Announced July 22 acquisition of non-licensed assets of WDKA (Paducah, KY) & KBSI (Cape Girardeau, MO) with option to acquire licenses.
The deals that have been announced so far were pretty marginal. Gray was doing station swaps with EW Scripps and taking out small stations in challenging markets. The head turning one was the Allen Media acquisition that Gray announced last week right after they put out their earnings. And then, news was leaked that Nexstar was in advanced talks to acquire TEGNA.
The Nexstar/TEGNA merger is major news for the industry. This will push the FCC to make an important decision on if large scale acquisitions in the industry will be allowed. If the FCC green lights the merger, I expect Media Merger Mania will begin. The capital markets will open up, station swaps will happen on a monthly basis and valuations will get lifted.
In the article below, I will go into my personal thoughts on how I think mergers will play out between all of the public players: Nexstar, TEGNA, Sinclair Broadcasting, E.W. Scripps, Gray Media, Entravision Communications and Mediaco. I also highlight what price I think TEGNA will accept a deal from Nexstar and why this valuation makes sense.
I am long most of these players and broadcast assets remain a key pillar to my current portfolio.
I hope you enjoy…
Let’s first analyze TEGNA there is an event driven opportunity here when the market opens tomorrow morning.
First, TEGNA has a market cap of $2.4 billion. They have $716 million of cash and around $3 billion of debt. The enterprise value is $4.6 billion. The key item to note is that back in 2022, Standard General was close to acquiring TEGNA for $8.6 billion. The deal fell through because of regulatory hurdles, despite TEGNA agreeing to this deal. Since then, TEGNA has used the majority of its free cash flow to gobble up its shares outstanding and paid hefty dividends. The equity value of the deal was $5.4 billion.
I believe that TEGNA will not accept a deal from Nexstar unless the equity value meets, or exceeds $5.4 billion. With 161k shares outstanding, this would be a share price of $34.81. In the after hours of trading, TEGNA’s stock price ran to $19.99. The market might not recognize the significance of this deal or it might think the FCC will not allow it. Anything in the low $20 per share looks like free money to me.
The key industry wide question that media analysts should be asking is how will Nexstar fund this deal. If it is an all cash deal, mixed with some debt, then there will be less capital in the industry to consolidate. This would be a net negative for less well capitalized players such as E.W. Scripps, who has publicly stated that they are looking to sell assets in this deregulatory environment to decrease financial leverage. However, if the deal is a mix of cash and stock, then it would be possible for Nexstar to continue to roll up the industry and do a few more deals.
However, there are a few “hidden” players in the industry that I think will emerge as buyers of broadcast assets. The first one is Standard General.
Standard General, led by Soo Kim, initially targeted Young Broadcasting during its post‑bankruptcy restructuring—becoming the majority owner around 2012—and subsequently orchestrated a merger with Media General in 2013, setting the stage for Nexstar's $4.6 billion acquisition in 2016. Later, in 2022, Standard General attempted to take TEGNA private via an $8.6 billion deal (including debt), but the transaction was ultimately derailed in 2023 amid regulatory delays and an FCC referral to an administrative law judge.
I believe that Standard General has already started moving the chess pieces together with their publicly traded vehicle Mediaco $MDIA. For those who follow the industry closely, Mediaco acquired a Hispanic television and radio company called Estrella Media in 2024. What is particularly interesting, Entravision EVC 0.00%↑ recently closed their expensive Santa Monica headquarters and moved directly into Estrella Media’s headquarters in Burbank, California (you can see Estrella Media’s headquarter address here at the bottom of their website and Entravision’s new headquarters here at the top of their recent 10-Q). Both Estrella Media and Entravision are Hispanic based television and radio companies and a combination here makes sense.
The second major player, who is likely to continue acquiring broadcast assets is Rincon Broadcasting.
Rincon Broadcasting Group is a privately held TV broadcaster founded in 2024 by industry veteran Todd Parkin and based in Atlanta, Georgia. The company has quickly grown into a 12-station portfolio across the Midwest, Pacific Northwest, Southwest, and South, fueled by two major 2025 acquisitions: five stations from Sinclair Broadcast Group for $29.4 million and seven more from Imagicomm Communications. Targeting mid-sized markets often overlooked by larger groups, Rincon emphasizes local news, community programming, and technology upgrades like ATSC 3.0, and appears poised to keep expanding in the deregulation-friendly FCC climate under Chairman Brendan Carr.
What’s intriguing about Todd Parkin is the indirect link between his career and the ownership structure of Bally’s Corporation BALY 0.00%↑Parkin once worked at Sinclair in its regional sports network division. In 2020, Sinclair struck a 10-year naming-rights and marketing deal with Bally’s, rebranding those RSNs as Bally Sports. The agreement gave Sinclair penny warrants for up to 14.9% of Bally’s stock, performance-based warrants for another 10%, and options for an additional 5%—potentially totaling nearly 30% ownership on a fully diluted basis—plus annual branding fees and a share of Bally’s marketing spend. As of February 2025, Standard General controls about 73.8% of Bally’s following its merger with The Queen Casino & Entertainment.
There is a weird link between Standard General, Sinclair and Rincon Broadcasting, which makes me speculate that Rincon could be backed by Standard General. I am not the only one who is speculating this as reddit user “Defiant-Writing5439” has made a similar comment here.
If this is true, I believe that Rincon Broadcasting could be another well capitalized broadcaster that has access to the capital markets. This makes me think that they will continue to do more deals with Sinclair Broadcasting, and maybe even E.W. Scripps, as Scripps has desirable assets that they are looking to sell.
In terms of Gray Media, I do not think that they are sellers given the deals that they have already struck. I think Gray will likely digest the current deals they have through the remainder of the year, and then in 2026, start making more station swaps or outright acquisitions like they did with Allen Media.
On the financial side, private equity and investment firms remain active in U.S. broadcast television M&A, especially as deregulation under the current FCC makes larger ownership footprints more viable. Apollo Global Management, which owns Cox Media Group, has the scale and capital to pursue additional station buys when strategic. However, it is rumored that Cox is for sale and they are not likely buyers here. Firms like Fortress Investment Group and Providence Equity Partners have a history of investing in local media assets for their steady cash flows, while smaller funds and family offices are increasingly eyeing broadcast properties as stable, yield-generating plays with upside from retransmission consent fees and digital spectrum opportunities.
Then there is Fox Corporation FOX 0.00%↑ which owns a broadcast arm. I am unsure if Fox is a buyer or seller, but this is a player that could emerge.
Overall, I believe the next couple of years will result in Media Merger Mania for broadcast assets. Deals will be made and likely pushed through the FCC successfully. For speculation, this is what I think could happen:
Nexstar buys TEGNA. If they do cash and stock deal they will likely do another deal. A portion of E.W. Scripps assets would make sense here if they have capacity to do another deal.
Mediaco buying Entravision.
Rincon Broadcasting continuing to buy Sinclair assets, or doing a transformational deal (maybe buying Cox).
Sinclair emerging as a buyer if they monetize their VC portfolio and use it to acquire assets.
Gray Media doing smaller tuck-ins, station swaps, or a mix of cash/stock with someone like E.W. Scrips.
Fox Corporation potentially stepping up to use their strong balance sheet to acquire more asset — though I think they are more of a seller — maybe Rincon?
Disclosure: I own positions in Entravision Communications $EVC, Gray Media GTN 0.00%↑ and TENGA TGNA 0.00%↑. I will buy or sell my shares anytime following this article. This is not investment advice. Everything here is speculation. Do your own research.
Have to wonder why this didn’t give EVC a kick today?