A federal judge temporarily blocked Nexstar’s $6.2 billion merger with Tegna after 8 states and DirecTV sued. Nexstar plans to appeal the judge’s decision.
SACRAMENTO, Calif. — A federal judge has blocked a $6.2 billion merger of local television giants Nexstar Media Group and rival Tegna until an antitrust lawsuit is resolved.
U.S. District Court Chief Judge Troy L. Nunley in Sacramento, California, made the ruling late Friday afternoon, finding that eight attorneys general and DirecTV were likely to prevail in their legal bid to stop the merger. The attorneys general, all Democrats, and DirecTV contend the merger will lead to higher prices for consumers, stifle local journalism and that the deal runs afoul of federal laws designed to protect against monopolies.
The deal, announced last year and approved by the Federal Communications Commission, would create a company that owns 265 television stations in 44 states and the District of Columbia, most of them local affiliates of one of the “Big Four” national networks: ABC, CBS, Fox and NBC.
That would likely give Nexstar the power to raise the retransmission fees it charges to video programming distributors like DirecTV, which means higher bills for consumers, Nunley wrote. The company also has a track record of consolidating local television news stations when it owns more than one station in a market, the judge said, meaning viewers “will lose options for where to get their local news.”
The deal could also force distributors like DirecTV to comply with Nexstar’s demands for higher broadcast fees or risk leaving subscribers potentially unable to watch things like Sunday NFL football games, the judge said.
Stopping the merger for now is “in the public interest,” Nunley wrote.
Nexstar’s attorneys told the court the deal has already been reviewed and cleared by the FCC and the Department of Justice. They said the FCC order commits the company to expand local journalism and programming, not shrink it.
The merger needed the approval of the Republican Trump administration’s FCC because the government had to waive rules that limit how many local stations one company can own. FCC Chairman Brendan Carr said in March that the company had agreed to divest itself of six stations.
The judge said the FCC clearance process for the deal was “unusual,” and that the regulatory oversight “did not curb the manifest anticompetitive effects of this acquisition.”
The Department of Justice, which is tasked with conducting antitrust reviews of these types of mergers, announced it was closing its investigation of the deal in March through “early termination,” the judge noted, ending the review process sooner than is normally required by statute.
“In unusual circumstances — with the FCC’s quasi-adjudicatory licensing proceeding still pending — the President himself weighed in publicly in February and urged federal regulators to approve the deal to ‘knock out the Fake News,’” Nunley wrote.
The preliminary injunction is designed to keep things as they are until the lawsuit is fully decided, Nunley said.
California Attorney General Rob Bonta called the ruling “a critical win” in a statement released Friday evening. “This merger is illegal, plain and simple,” said Bonta. “The federal government may have thrown in the towel, but we’ll keep fighting for consumers, for workers, for affordability, and for our local news.”
Nexstar Media Group, Inc. released a statement Friday to say they will appeal the judge’s decision:
“This transaction closed more than four weeks ago following receipt of all required regulatory approvals from the Federal Communications Commission and the U.S. Department of Justice. Nexstar Media Group now owns TEGNA and has taken steps consistent with the Court order that has been in effect. For nearly thirty years, Nexstar has provided free over-the-air access to all its broadcast stations — local news, weather, and community-focused programming alongside major network programming. This pro-competitive transaction will make local stations stronger and support continued investment in local journalism and fact-based news. We will appeal today’s decision and look forward to presenting our case on its merits before the Ninth Circuit Court of Appeals.”
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