Nexstar’s $6.2 billion acquisition of rival TV station group owner Tegna is on hold after a federal judge ruled that the proposed merger “is presumed likely to violate antitrust laws based on the combined firm market share alone.”
The deal would augment Nexstar, already the biggest TV station group in the U.S., with Tegna’s footprint — resulting in a company with 259 full-power stations affiliated with networks including ABC, CBS, Fox and NBC. The deal would give the combined company reach across 80% of U.S. TV households. Nexstar announced on March 19 that the Tegna deal had closed following FCC and Justice Department approvals.
But now the deal has been paused amid legal challenges asserting that Nexstar-Tegna violates antitrust laws. On Friday, Judge Troy Nunley of the U.S. District Court for the Eastern District of California issued a 14-day temporary restraining order blocking the Nexstar-Tegna merger, in response to a lawsuit filed by DirecTV. Nunley scheduled an April 7 hearing in the case to review whether the deal violates antitrust law and warrants a preliminary injunction to stop it.
In his ruling, Nunley wrote that Nexstar and Tegna “do not contest this merger will increase Nexstar’s bargaining leverage to extract higher fees.” Per the judge’s order, Tegna and Nexstar for now must operate separately and may not share any “competitively sensitive” information, including any information related to retransmission fee negotiations, among other restrictions.
DirecTV on March 18 sued Nexstar and Tegna, asserting that the proposed merger represents a concentration of broadcast media “without precedent,” and will “irreparably drive up consumer costs, reduce local competition, shutter local newsrooms, and increase both the frequency and duration of blackouts of key local teams and network programming,” according to the company.
Separately, also on March 18, eight state attorneys general including from California and New York sued to stop the Nexstar-Tegna merger on the same grounds.
In response to a request for comment, a Nexstar rep said that the company “does not comment on pending litigation.” Tegna and DirecTV did not respond to requests for comment.
In approving the deal, the FCC granted the companies a waiver of its ownership-cap rule that prohibits any local station owner from reaching more than 39% of U.S. households. Nexstar has committed to divesting six stations across six different markets as well as “commitments that go to affordability and localism,” per the FCC.
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