Nexstar, Mission Separate Companies in Eyes of FCC Despite Appearances

By Federal Communications Commission standards, Nexstar Broadcasting of Irving, Texas, doesn’t own Mission Broadcasting.

The FCC allows media companies to own two television stations in a market under certain conditions, but the FCC does not permit ownership of more than two.

However, recent developments make Mission and Nexstar look a lot like a single entity. And if they were a single entity, that entity would now own four TV stations in Little Rock.

Mission, of Westlake, Ohio, bought Little Rock TV stations KLRT-TV, Channel 16, and KASN-TV, Channel 38, about a month ago from Newport Television of Kansas City, Mo.

The move continued a business model established by the two companies over several years: Mission owns a television station, and Nexstar provides certain services — sales support, shared newsgathering resources and staff — to that Mission station, even when Nexstar owns competing television stations in the same market.

While Nexstar doesn’t officially own Mission, it does hold a controlling interest in the company, according to generally accepted accounting principles. Publicly traded Nexstar acknowledges this in its annual reports, noting that it has “power over significant activities affecting Mission’s economic performance, including budgeting for advertising revenue, advertising and hiring and firing of sales force personnel.”

Evidence of that power has played out in the weeks since Mission officially closed on its purchase of KLRT and KASN. Mission and Nexstar have been consolidating station operations, collapsing both operations into one, with Mission’s new holdings appearing to take the brunt of the cuts.

For example, on Jan. 3, Mission laid off Chuck Spohn, KLRT’s long-time general manager. Mike Vaughn, general manager of Nexstar’s Little Rock stations —KARK-TV, Channel 4, and KARZ-TV, Channel 42 — is now GM of both Nexstar’s and Mission’s Little Rock stations.

The Mission stations no longer have their own offices on Colonel Glenn Road, but have been moved into Nexstar’s Victory Building space on Capitol Avenue downtown, which continues to be headquarters for KARK and KARZ.

And last Tuesday, when KLRT saw about 20 of its employees laid off, Nexstar’s KARK laid off around eight people.

The same day, Vaughn said two Nexstar employees, Deedra Wilson and Greg Dee, would be the anchors of the new morning news show on Mission’s KLRT.

“We will be looking to allocate the resources that we have to protect both brands — both NBC’s and Fox’s,” Vaughn said.

What It Means

So what does this all mean for the other TV stations in Little Rock? Has the market for news and advertising fundamentally shifted?

“I don’t think it’s going to change the news market,” said Mark Rose, general manager of KATV-TV, Channel 7.

Under Nexstar management, KLRT was slated to lose its 5 p.m. and 10 p.m. news shows in favor of a 5:30 p.m. show and an hour show starting at 9 p.m. That change could be positive for KATV, if KLRT viewers at the old times look for other options, Rose said.

“I think if you look at the history of those particular newscasts, they’ve not performed particularly well against what we still consider the big three,” Rose said, referring to KARK, KATV and KTHV-TV, Channel 11.

A hardship of the consolidation of KARK and KLRT operations is the loss of TV jobs in the Little Rock area, which, as a market, already had suffered TV job cuts during the Great Recession, Rose said.

“It’s going to be difficult for them to find work, I think, in the industry,” he said of the people affected by last week’s layoffs.

KTHV General Manager Michael Caplan declined to comment for this column.

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