00:00So the media environment has changed a lot over the past couple decades, but FCC rules haven't.
00:07And so broadcast TV station owners for years have been stuck with this limit on how big they can
00:15grow. The FCC rule said no company can reach more than 39 percent of U.S. households. And what the
00:24FCC did yesterday is scrap that rule and say, look, we're not going to have this numeric limit
00:31on companies anymore. So this presents a really big opportunity for companies like Nexstar,
00:38Sinclair that own the TV stations across the U.S. to to grow larger because they're not,
00:45you know, hamstrung by this this long existing FCC rule anymore.
00:51What does this mean for media consolidation? I feel like there's always this statistic. We hear
00:55that there are these six conglomerates that now control 90 percent of U.S. media. Is that likely
01:01to get more extreme? I mean, that doesn't seem like necessarily a great thing for for voters.
01:07Right. So so this you know, when you listen to FCC Chairman Brendan Carr, he said this is really about
01:14empowering local TV stations so they can compete with those big national media companies. Right now,
01:23those stations really have very little leverage when they negotiate with ABC, CBS, NBC and with cable
01:31companies when they have to get their their media distributed. So in Brendan Carr's view, this is about
01:37sort of empowering a new set of entities in that media ecosystem that the owners of these local stations
01:45that right now are, you know, they're they're limited or previously were limited by this FCC rule that could only
01:51get so big. So they had no leverage. This gives them more of a voice in Brendan Carr's view against
01:58those
01:59national media companies. So maybe it leads to to a little more competition in that space.
02:05So this is deregulation, essentially, and the broadcast industry has been waiting for it for a
02:10long time. Which companies are going to jump on this and make a move?
02:15So Nexstar has already jumped on it with its acquisition of Tegna, but there was sort of a
02:22legal cloud around whether they could do that. You know, by acquiring Tegna, they went way beyond the
02:2839 percent U.S. ownership cap. And the FCC at the staff level said, you know, we'll waive that that
02:34requirement. Don't worry about it. That was sort of legally questionable. This is the right way to do
02:39it, to do it through through a rulemaking to actually change the rule. So it's an opportunity
02:46for Nexstar to get past legal hurdles on its Tegna acquisition company like Sinclair could could also
02:52look at this. It featured prominently in the company's earnings call a couple of days ago.
02:57There could be opportunities to grow much larger, go way beyond the 39 percent. But one big and
03:03important footnote, there's going to be a legal challenge to all of this. That's coming next.
03:08It's not totally clear the FCC can do what it did or whether only Congress can do it. That's going
03:15to
03:15be the fight that plays out next. What is the legal challenge exactly?
03:20So in 2004, Congress told the FCC, let's set that limit, that ownership limit at 39 percent. And it
03:29said, FCC, change your rule to make it 39 percent. The question is, when Congress did that in 2004,
03:36did it mean that the FCC can't update that rule later? Is it only Congress's call? And there are
03:43strong arguments on both sides that that, you know, the FCC says, look, we still have our power
03:49to modify our rules. Congress didn't take that away. The other side said, no, Congress was pretty
03:53clear. We want 39. And it said that five times in its statute, 39 percent. So it's not clear that
04:00the FCC can can use its general modification power. That's going to have to play out in appeals court
04:05and in the Supreme Court. Did Congress give the FCC its general discretion to update its rules?
04:11Or was this a call that Congress reserved for itself?
04:15All right, Matt, one final question before we let you go. From where you sit, Paramount Skydance,
04:20Warner Brothers Discovery. Is anything going to happen in the next couple of weeks?
04:25Yeah, I mean, so so lots of moving pieces on that on the antitrust side. And Jen Rhee
04:31is really our go to on on on all of those those questions. So
04:35So
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