(MENAFN- Live Mint) Media executives see the possibility for more mergers and deregulation enabling the growth of broadcast and TV empires with the election of Republican Donald trump to the US presidency.
Warner Bros. Discovery Inc. Chief Executive Officer David Zaslav suggested to investors Thursday that sped-up deal-making could help address consumer pain points, while Nexstar Media Group CEO Perry Sook laid out a vision for expanding the largest local TV station owner, aided by rule changes at a conservative federal Communications Commission.
The new administration“may offer a pace of change and an opportunity for consolidation that may be quite different,” Zaslav said on an earnings call.“That would provide a real positive and accelerated impact on this industry that's needed.”
Media and telecom executives have begun weighing in on what a second Trump presidency may mean for an industry that's heavily regulated and undergoing enormous technological changes as consumers shift from traditional TV viewing to a host of online outlets. For Sook's Nexstar, the“No. 1 legislative priority” is the deregulation of station ownership at the national and local level. Among the rules he'd like to see a Trump administration dismantle is a national cap on the number of US households one company can reach.
The FCC fined Nexstar $1.2 million in March for effectively maintaining control over a station the agency required it to divest as a condition of its 2019 Tribune Media acquisition, which put it over the nationwide ownership limit. A single broadcaster isn't allowed to reach more than 39% of US households.
“Our industry's real competition comes from big tech companies who have unfunded access to every screen in America from phones to desktops to the TV in the living room,” he said on an earnings call Thursday. But corporations like his are constrained by“regulations that were last updated in 2004.”
Sook also said cuts to corporate tax rates under Trump could lead businesses to spend more on advertising.
Leniency for broadcasters will be a very real side effect of a Trump administration, said Lee Petro, a partner at law firm Dickinson Wright and former chair of the Federal Communications Bar Association. Senior FCC Republican Brendan Carr, who wrote the FCC chapter in the unofficial Trump transition plan Project 2025, is widely expected to be nominated as agency chair, succeeding Democrat Jessica Rosenworcel.
“At the very least, we'll see an uptick in merger and acquisition deals getting through the FCC that may not have been pitched during Chairwoman Rosenworcel's time,” Petro said.
Among the deals already facing FCC regulatory scrutiny is Paramount Global's planned merger with David Ellison's Skydance Media. Ellison is the son of Trump supporter and Oracle Corp. co-founder and CEO Larry Ellison, who is helping finance the merger. DirecTV is in the process of merging with EchoStar Corp.'s Dish Network, uniting the two largest satellite TV providers.
During Trump's first administration, the Department of Justice unsuccessfully sued to block AT&T Inc.'s acquisition of what was then called Time Warner Inc. Now running the business known as Warner Bros. Discovery Inc., the parent of CNN and streaming platform Max, Zaslav said the market is crying out for more rationalization.
“Consumers put on a TV set and they see 16 apps and each of those are doing different pricing,” Zaslav said.“It's just not a good consumer experience.”
Bankers and lawyers also see Trump's pro-business focus as a boon for deals, after President Joe Biden's administration have taken a more restrictive view on deals seen as having the potential to concentrate corporate power and limit consumer choice.
An FCC guided by the Trump administration has the potential to reshape more than just the broadcast and media landscape. In 2025, the FCC will also look to undo Rosenworcel's drive toward federal broadband regulation, including net neutrality and digital discrimination regulations, according to Bloomberg Intelligence analyst Matthew Schettenhelm.
The Democratic FCC's net neutrality rules, currently being litigated in federal court, prohibit internet service providers from blocking, speeding up, slowing or granting paid priority to web traffic.
Digital discrimination regulations, enacted last November, aim to ensure people have access to a consistent quality of internet service regardless of income level, race, ethnicity, color, religion or national origin. They allow the FCC to investigate complaints that service providers are offering network services in ways that disproportionately affect underprivileged communities and find companies liable regardless of their intent to discriminate.
A Republican-led FCC will also likely revive the first Trump administration's push to fold oversight of Section 230 of the Communications Decency Act into the commission's duties. The provision shields most big tech platforms from liability for the content they host on their platforms. While the FCC doesn't regulate web platforms, Carr has been a vocal advocate of finding an avenue for the agency to do so.
Broadband For All
Internet service providers are also eying how the new administration might change the industry.
Chris Winfrey, CEO of Charter Communications Inc., the largest US cable-TV provider, sees low-cost broadband service for Americans as a key focus for the new president.
“We look forward to helping with your efforts to deliver the affordable internet service families need to achieve their American Dream – including in the rural areas that we are now building,” Winfrey said in a statement congratulating Trump on Wednesday.
Funding for broadband will remain a hot topic in the wake of the end of the Affordable Connectivity Program, a Covid-era initiative that Congress failed to renew despite its bipartisan support. Improving the way the FCC's current slate of Universal Service Fund subsidy programs work - or overhauling them entirely - will be high on the agenda, said Jennifer Richter, who heads Akin Gump Strauss Hauer & Feld's telecom, media and technology practice in Washington.
“Carr has already been thinking about that top-to-bottom review of the regulations, to remove regulations that are outdated or overly burdensome,” she said.
The FCC's broadcast license review cycle will begin in Trump's term and it's unclear whether the new administration will seek to impose new conditions on broadcasters in order to keep their licenses.
Trump has been openly hostile to the mainstream media, which he calls“fake news.” He's made various threats against media companies from CNN and the New York Times. After 60 Minutes interviewed Kamala Harris this fall, Trump sued its parent network CBS for $10 billion and threatened to pull its broadcast license over concerns on how the piece was edited.
In March, Trump sued ABC News and anchor George Stephanopoulos, alleging comments he made about Trump being found liable for rape, rather than sexual abuse, were defamatory. After ABC News hosted the presidential debate on Sept. 10, he called for the network to have its broadcast license revoked over claims of unfair fact-checking against him. He has demanded NBC, owned by Comcast Corp., be investigated for“treason” over its coverage of his criminal cases.
“I don't think any of us would be surprised if we see some very harsh questions about whether over-the-air broadcasting licensees have additional obligations to be unbiased,” Petro said.
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