Trump is threatening broadcast station licenses – what that means, and how it all works

Disney’s decision this week to pull “Jimmy Kimmel Live!” from its broadcast network ABC is shining a light on a part of the media business in which the federal government has control. 

On Thursday, President Donald Trump suggested his administration should revoke the licenses of broadcast TV stations that are “against” him. Federal Communications Commission Chair Brendan Carr has made similar threats, including during a CNBC interview, also on Thursday.

It’s not the first time Trump or Carr has invoked the government’s power to pull a broadcast station license – putting an in-the-weeds part of the media business front and center for consumers, and flexing the government’s power over a major part of the industry. 

Let’s start with the basics: Networks like Disney’s ABC, Paramount Skydance’s CBS, Comcast Corp.’s NBC and Fox Corp.’s Fox are part of a system beholden to licensing over-the-air spectrum from the government in order to broadcast these household name stations. 

That means free, over-the-air service to anyone with an antenna on their TV. 

Pay TV networks like CNN, MTV or FX, for example, are considered “over-the-top” and available for subscription fees. They’re often bundled together and distributed by companies like Comcast, Charter Communications or DirecTV. 

Broadcasters like ABC are known for programming including local news, live sports games and content including primetime sitcoms and dramas, as well as late night shows like “Jimmy Kimmel Live!”

Although the way consumers watch these programs has significantly changed from the days of using an antenna for free viewership – now often viewed via pay TV bundles, plus the content is frequently found on streaming platforms – the model has remained largely the same. 

The companies that own local broadcast TV stations like Nexstar Media Group and Sinclair license spectrum — or the public airwaves — from the government, with the FCC in control. 

Through this public spectrum for radio and TV stations, the federal agency has the right to regulate broadcasting, and in exchange, requires the networks “by law to operate its station in the ‘public interest, convenience and necessity.’ Generally, this means it must air programming that is responsive to the needs and problems of its local community of license,” according to the FCC website.

That definition of serving the “public interest” is where the FCC’s Carr has zeroed in with conversations around revoking licenses. 

On Thursday, Carr told CNBC’s “Squawk on the Street” that comments by Kimmel, linking the alleged killer of conservative activist Charlie Kirk to Trump’s MAGA movement, were “not a joke,” and instead, he said, were “appearing to directly mislead the American public about … probably one of the most significant political events we’ve had in a long time.” 

When Trump noted the government’s right to take away licenses – both this week and in the past – he pointed to what he believes is bias against him as president. 

“I have read someplace that the networks were 97% against me, again, 97% negative,” Trump said Thursday referring to his 2024 election victory. 

“They give me only bad publicity, press. I mean, they’re getting a license,” Trump said. “I would think maybe their license should be taken away.” 

In August, Trump accused networks ABC and NBC of being “two of the worst and most biased networks in history,” and suggested revoking their broadcast licenses.

Carr earlier this year, freshly in his post as FCC chairman, reawakened complaints directed at ABC, NBC and CBS from the conservative organization the Center for American Rights. 

And in February, during a conversation at Semafor’s “Innovating to Restore Trust in News” summit in Washington, D.C., he suggested the agency would be looking closely at licenses. 

“If you’re going to have a license to be a broadcaster, it comes with something called ‘you have to serve the public interest.’ If you don’t wanna do that, that’s OK,” said Carr during the summit. “I will give you the address of the FCC  … you’re free to turn your license in and you can go podcast and you go over-the-top.” 

If the federal government deems a broadcast TV network isn’t acting in the public interest, it can revoke the license from the station’s owner, and the local station would effectively go dark in its market. 

The local networks can preempt the programming, meaning air something other than what the broader network is offering up. That would theoretically keep the stations in compliance if the FCC were to find the broadcast content unlawful. But it’s unclear where that line would fall. 

The process of revoking a license isn’t so simple, according to Roy Gutterman, a professor and expert on communications law and the First Amendment at Syracuse University’s Newhouse School.

“There’s a whole process before you can yank someone’s license,” said Gutterman, adding the matter would be subject to an investigation and procedure — and would likely garner legal challenges. 

Typically, the discussion of whether a station violated the FCC’s guidelines centers around children’s programming, a cut to news content or obscenity – such as Janet Jackson’s wardrobe malfunction during the Super Bowl in 2004.

Trump and his administration’s threats take a different tack.

“This is such an unprecedented issue,” Gutterman said. “Responsible use of the airwaves doesn’t mean having the political language [the government] doesn’t want on there … Responsible use isn’t a political issue.”

There’s another factor at play here: The government’s role in local TV consolidation.

On Wednesday, before ABC sidelined Kimmel, Nexstar announced its stations affiliated with ABC wouldn’t air the late night show, and instead would preempt it “for the foreseeable future” due to the host’s statements. 

While Disney owns a portion of its ABC affiliated networks, Nexstar, as well as Sinclair – which similarly said it would preempt the show – own the vast majority. Nexstar owns about 30 ABC affiliated networks across the U.S. – or 10% of the more than 200 stations Nexstar owns in total.

Nexstar is currently seeking government approval of a $6.2 billion deal to merge with fellow broadcast TV station owner Tegna, which would upend longstanding regulations for broadcast station owners. 

Sinclair has also said it’s looking to merge its broadcast TV station business with another competitor, although a deal has yet to be announced. 

While Nexstar and its peers have bulked up over the years through acquisitions, they’ve been subject to longstanding federal limits on the number of stations that these parent companies can own. 

Following Trump’s election in November, leaders of the station owners – as well as other media businesses – saw an opening for further consolidation and deals. 

The FCC’s Carr has also publicly said in recent months that he would support getting rid of broadcast station ownership rules and caps, paving the way for such deals, which could help salvage a business model that’s being disrupted. 

With the rise of streaming, the pay TV ecosystem has bled consumers, and broadcast TV networks and local affiliates have also felt the effects. 

While the stations are free to air, distributors like Charter pay the broadcasters so-called retransmission fees, on a per-subscriber basis, for the right to carry the stations. These lucrative fees heavily buoy the profits of companies like Nexstar, which means dwindling pay-TV customers cuts into broadcast profits. 

Disclosure: Comcast is the parent company of NBCUniversal, which owns CNBC. Versant would become the new parent company of CNBC under a planned spinoff.