In a move that could reshape the U.S. television broadcasting landscape, Nexstar Media Group is reportedly in advanced talks to acquire rival broadcaster Tegna Inc., according to Reuters and AInvest. The potential merger, which comes amid sweeping regulatory changes and shifting consumer habits, has already sent Tegna’s stock soaring by 30% in after-hours trading. While Nexstar’s shares remained largely flat, the heightened activity underscores the significance of this possible consolidation at a time when the industry faces mounting pressure from cord-cutting and the explosive growth of streaming platforms.
At the heart of this development is a dramatic shift in federal regulation. In July 2025, the Federal Communications Commission (FCC) took the notable step of moving to “refresh the record” on national ownership caps—a process that could ultimately eliminate longstanding restrictions on how many stations a single entity can own. This follows a pivotal decision by the Eighth Circuit Court of Appeals, which struck down the so-called “Top Four” rule. That rule had previously barred any one company from owning two of the top four stations within a single market, effectively limiting large-scale consolidation.
FCC Chairman Brendan Carr has championed this deregulatory agenda, creating what many see as a permissive environment for mergers and acquisitions. According to AInvest, Nexstar CEO Perry Sook has made it clear that the company’s interest in a deal with Tegna is closely tied to these regulatory developments. Sook expects that a new ownership order could be finalized by year’s end, opening the door for industry-shaping deals. Tegna’s CEO, Mike Steib, echoed this optimism during the company’s August 8 earnings call, describing the court ruling as “a significant step forward for our industry.” Steib added, “We believe deregulation is coming and will create significant opportunities. We are open to being a buyer or seller, depending on the opportunities, and are disciplined in our approach.”
For Tegna, the timing couldn’t be more critical. The company has weathered several challenging quarters, reporting revenue of $675 million in Q2 2025—a 5% decline year-over-year, as noted by AInvest. Adjusted EBITDA also fell 14% to $151 million, reflecting both cyclical dips in political advertising and broader macroeconomic headwinds. Yet, the company’s disciplined approach to cost-cutting and debt management has kept its net leverage ratio at 2.8x as of June 30, 2025—well within acceptable bounds for a merger candidate.
Valuation is another key factor drawing investor attention. Tegna currently trades at a trailing P/E ratio of 5.39, significantly below its 10-year historical average of 8.8. This discount, while reflecting skepticism about Tegna’s standalone growth prospects, also makes the company an attractive takeover target. The market’s reaction has been swift: after reports of merger talks surfaced, Tegna’s shares surged 30% in extended trading, with investors clearly anticipating a premium offer.
The strategic logic behind the deal is compelling. A merger would create a broadcasting powerhouse with a combined 264 stations across 167 markets. Nexstar already owns or partners with more than 200 stations in 116 markets and operates high-profile properties such as The CW and NewsNation. Tegna, meanwhile, brings regional strength in 14 top U.S. markets, a portfolio of 64 stations, and networks including the True Crime Network. According to Reuters, the merger would also bolster digital content initiatives at a time when local journalism faces unprecedented challenges.
Financially, the combination could unlock significant synergies. Nexstar’s track record in digital transformation and cost optimization could help improve Tegna’s margins, while Tegna’s relatively healthy balance sheet—strengthened further by a recent $250 million debt redemption—provides flexibility for financing. Tegna’s total debt stands at $3.09 billion, but its projected free cash flow of $900 million to $1.1 billion over the next two years offers a robust cushion for the combined entity.
Still, the path forward is not without risks. Regulatory uncertainty looms large, especially given the possibility of political shifts that could reverse the FCC’s current deregulatory course. Overlapping station ownership in key markets could force divestitures, and Tegna’s debt load may raise concerns if the merger results in additional leverage. The memory of Tegna’s failed 2022 agreement with Standard General—a deal valued at $8.6 billion including debt that was ultimately scrapped due to regulatory scrutiny—serves as a cautionary tale. However, as AInvest points out, Nexstar’s successful navigation of past regulatory hurdles, such as its 2023 acquisition of Tribune Media, suggests these obstacles may be surmountable given the current climate.
Industry observers see this potential deal as emblematic of broader trends. The U.S. television sector is under intense pressure to consolidate as traditional broadcasters grapple with declining ad revenues, audience fragmentation, and the relentless advance of streaming giants. According to Reuters, the expected loosening of FCC regulations under U.S. President Donald Trump’s administration has only accelerated these dynamics, with companies like Nexstar and Tegna eager to scale up and diversify their revenue streams.
For investors, the implications are significant. Tegna’s discounted valuation, strategic assets, and alignment with regulatory trends make it a high-conviction takeover candidate. Should the merger go through, Tegna’s shares could see a premium of 30-40%, based on Nexstar’s $5.6 billion market cap. Even if talks falter, Tegna’s strong free cash flow and ongoing debt reduction efforts provide a measure of downside protection. As one investment thesis put it: “Buy Tegna (TGNA) for a potential merger premium and long-term consolidation tailwinds, with a stop-loss at $15 to mitigate regulatory risks.”
Both companies have declined to comment publicly on the ongoing discussions, citing the confidential nature of the talks. However, sources familiar with the matter told Reuters that a deal could be finalized soon, provided negotiations avoid last-minute obstacles. With the FCC poised to finalize new ownership rules by the end of 2025, the window for transformative deals like this may be brief.
As the U.S. broadcasting industry stands at a strategic inflection point, the potential Nexstar-Tegna merger is more than just a headline—it’s a bellwether for the future of local media, regulatory policy, and the enduring battle between traditional broadcasters and digital disruptors. For now, all eyes are on the FCC and the boardrooms of Nexstar and Tegna as the industry holds its breath for the next big move.
