Did the Nexstar and Sinclair station groups overplay their hands by aggressively taking on Disney this week? The decision to yank “Jimmy Kimmel Live” off their ABC affiliates — repping a combined 25% of the TV audience — may have an impact on several fronts, including the relationship between Disney and those two station groups moving forward, as well as the ongoing debate over loosening or abolishing the nationwide TV station ownership cap.
Nexstar is looking to acquire fellow station group Tegna in a $6.2 billion deal, and many insiders in broadcasting believe that the company’s decision to pre-empt Kimmel (which led to his show being benched by ABC parent Disney) was done to curry favor with the Federal Communications Commission to approve that purchase. A Nexstar/Tegna combo would put the combined company over the current legal limits of how many local stations that one entity can own, which is why Nexstar and other broadcasters are pushing hard for the FCC to abolish that rule. The “station cap,” as it’s known in broadcast jargon, is set at a total reach of 39% of U.S. TV households. Broadcasters would like to see the FCC abolish the station cap entirely, or at lift it to 50% or more.
Nexstar denies that its move on Kimmel that spurred ABC’s decision had political motivations for the parent company. “The decision to preempt “Jimmy Kimmel Live!” was made unilaterally by the senior executive team at Nexstar, and they had no communication with the FCC or any government agency prior to making that decision,” Nexstar said in statement Thursday. But nonetheless, Nexstar’s announcement came only after FCC chairman Brendan Carr appeared on a podcast and strongly criticized Kimmel and ABC. A seemingly coordinated campaign of outrage against Kimmel began to build in right-wing media circles on Monday night and Tuesday after Kimmel’s Sept. 15 show.
Meanwhile, Sinclair Broadcast Group also has business with the FCC: Like Nexstar, the company would like to expand should the ownership cap be lifted; plus, it’s pushing hard on the new ATSC 3.0 standard which would allow it to monetize spectrum. (Sinclair, which has traditionally championed conservative viewpoints and commentators, took a harder line than Nexstar on Kimmel, demanding an apology from the host and a donation to Charlie Kirk’s Turning Point USA organization.) Sinclair didn’t respond to requests for comment.
Besides the question of whether Nexstar and Sinclair were catering to the FCC, the announcements by Nexstar and Sinclair also come as the relationship between the broadcast networks and their affiliates have become highly contentious as of late.
Local TV outlets receive retransmission payments from cable and satellite operators, and the networks take a cut of those retrans dollars. (That money sent to the networks is called “reverse compensation,” because once upon a time, the networks used to pay its affiliates to carry its lineups. Now, it’s the reverse and stations pay the networks.)
But affiliates have grown concerned that networks are demanding too much of that retrans money. Right now, most stations pay fixed fees to networks for the right to carry their fare (including sports), but as the payments local stations receive from pay TV distributors declines, they’re looking for a more variable payment model with the networks.
At the FCC, Carr has been quick to highlight the growing tension between national network operations attached to media giants and the interests of local station owners.
Did the Nexstar/Sinclair gambit work? Perhaps, at least in winning over Carr, who thanked Nexstar on social media “for doing the right thing,” seemingly putting the company in the FCC’s good graces. It was already likely this administration would lift or raise the ownership cap; now that Nexstar and Sinclair have found favor with Carr and Trump, it’s probably a done deal.
But this week’s events also now put Nexstar and Sinclair right in the middle of a national conversation about free speech and the First Amendment — and many more people who hadn’t heard of those companies before now see them as opponents in the free speech debate. That could lead to more push back from the public, guilds, unions and other entities that might aggressively fight against the idea of abolishing the station cap. “I think they’re going to hear from a lot of groups that would normally not speak up,” says one observer. (Ironically, Nexstar owns a news network, News Nation, that would seemingly be hurt by further free speech restrictions.)
The vast majority of TV stations are owned by a handful of broadcast TV giants such as Nexstar, Sinclair, Hearst, Scripps, Gray Television and Tegna, the group that Nexstar is hoping to acquire — and fears about local TV’s monopolies, exacerbated by this week’s Kimmel suspension, might make it tougher for even the FCC to rubberstamp an end to ownership caps.
Meanwhile, what’s to come of “Jimmy Kimmel Live,” should it return, on those Nexstar and Sinclair ABC affiliates? Nexstar and Sinclair may be loath to bring the show back, but execs familiar with the network/affiliate relationship say there are a number of possibilities for ABC in keeping “Jimmy Kimmel Live” around even without some affils. For one thing, the network could just put Kimmel back on the schedule without those station groups’ blessings, march forward “and see what those guys do,” one observer suggested.
For ABC, should some of its affiliates permanently abandon “Jimmy Kimmel Live,” there are several other options to fill the viewership gap. First off, in this digital era, a large chunk of the audience already catches Kimmel and his monologue via social media. Also, “Jimmy Kimmel Live” is streamed on Hulu, and audiences in Nexstar/Sinclair ABC markets could always find him there. And competitors in Nexstar/Sinclair markets looking to grab some eyeballs (as there will be quite a bit of interest in Kimmel’s return) and perhaps looking to ingratiate themselves with Disney might jump at the chance to clear “Jimmy Kimmel Live” and any other ABC series the network’s current affiliate refuses to broadcast.
Local station pre-emptions of network fare isn’t new. In 1993, 57 ABC affiliates — mostly in small- and medium-sized markets — refused to air the premiere of the Alphabet network’s “NYPD Blue,” citing concerns over content. So instead, ABC cleared the show on a mix of independent and Fox stations in those cities. When “NYPD Blue” became a massive hit, those ABC affiliate holdouts gave in and added the show back to their lineups. Similarly, it took time for CBS to get full nationwide clearance on “Late Show With David Letterman” when it first launched, but the Eye network found ways around that too.
Will the network/affiliate relationship between them and Disney already strained, will it fall apart if Nexstar and Sinclair permanently refuse to air “Jimmy Kimmel Live” (or “The View,” for that matter)?
After all, if Nexstar and Sinclair decline to clear some of ABC’s flagship shows, that will definitely have an impact on any affiliate renewals — and other stations may be waiting in the wings to take over. Most affiliate contracts are three-year deals, and media reports speculate that Disney’s ABC affiliation deals with both Nexstar and Sinclair are believed to be up at the end of 2026.
Losing ABC affiliations would be a hit to Nexstar and Sinclair, which would have to find replacement programming (or expand their local news offerings on those stations). But if those companies successfully get their wish and the station cap lifts, they can expand their national reach even further — and as this week proves, that could cause more of a headache for the traditional broadcast networks.
Should station groups grow in power and demand programming changes from networks like ABC, that could then become the tipping point. The broadcast networks, which have long been flirting with getting out of the linear business, might then accelerate such plans. In 2023, Disney’s Bob Iger suggested that linear networks “may not be core to Disney,” hinting that its broadcast and cable assets might eventually go on sale. Earlier this year, Iger backtracked those comments and threw his support behind holding on to linear. But a breakdown in deals with affiliates might reverse that again: Already, much ABC viewership is actually done on Hulu (or ESPN, in the case of Monday Night Football).
“The idea of having a tower sending out a signal to receivers is a pretty antiquated idea when KABC in Los Angeles could just put their programming on the internet,” said one longtime network exec. (And indeed, KABC, like most local TV stations now, already simulcasts all of its newscasts on an app.)
“By going down this path, it could open up a lot of unintended consequences for the broadcast station groups, precipitated by the federal government,” he added. “But a company like Disney, I think has a lot of options. Bob Iger said a few years ago the linear networks aren’t part of their core business. So the station groups, are kind of out there in no man’s land in some ways.
“Disney, in terms of emancipation from the affiliates, could find other ways [to disseminate ABC programming]. At this point, I think the ratings on broadcast television have never been lower, and an event like this could cause a paradigm shift.”
