Nexstar Media Group declared Thursday that its $6.2 billion takeover of rival TV station company Tegna had closed — but now eight state attorneys general seeking to block the merger have stepped up their legal fight.
On Friday, the eight states filed a motion for a temporary restraining order in California federal court that would enjoin Nexstar from “integrating or commingling the assets and operations it has acquired from what was, yesterday, a substantial competitor, Tegna” and forcing Nexstar to “hold separate the acquired Tegna assets pending further proceedings.”
The deal would augment Nexstar, already the biggest TV station group in the U.S., with Tegna’s stations — resulting in a company with 259 full-power stations (after divesting six), affiliated with networks including ABC, CBS, Fox and NBC. The deal will give the combined company reach across 80% of U.S. TV households; that violates the FCC’s ownership cap on any single company owning stations that reach more than 39% of the U.S., but the FCC has granted a waiver of that rule. The Justice Department also approved the Nexstar-Tegna deal.
Late on Wednesday, the states (California, Colorado, Connecticut, Illinois, New York, North Carolina, Oregon and Virginia) had filed suit in the U.S. District Court for the Eastern District of California to stop the Nexstar-Tegna merger, claiming it violates antitrust law.
The combination of the No. 1 and No. 3 largest TV station operations would “put more broadcast programming in the hands of fewer people, cut local jobs, increase cable bills, and significantly impact the delivery of news and other media content to Americans nationwide,” according to the office of California Attorney General Rob Bonta.
“The federal government has an obligation to protect our economy, consumers’ wallets, and competitive markets in which businesses and workers can thrive,” Bonta said in a statement issued Friday. “With its approval of the disastrous Nexstar/Tegna broadcasting merger, the Trump administration has once again put corporate interests ahead of the interests of everyday Americans — not on our watch. Today, alongside a coalition of attorneys general, I’ve filed an emergency motion asking the court to stop this merger. This merger is illegal, plain and simple, running contrary to federal antitrust laws that protect consumers. Nexstar/Tegna is not a done deal. I will not let these corporate behemoths merge without a fight.”
Reps for Nexstar and Tegna did not respond to requests for comment.
Separately, DirecTV sued Nexstar and Tegna in the same court on March 18, also seeking to block the deal. DirecTV said a combined Nexstar-Tegna 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.” A DirecTV said Friday that its lawsuit will proceed.
In their motion Friday, the states said a temporary restraining order “is necessary to avoid irreparable harm to the public interest and Plaintiff States’ ability to effectively enforce the nation’s antitrust laws.”
At the time the eight states filed their lawsuit, Nexstar and Tegna “had not yet received the necessary federal regulatory approvals to close the Transaction.”
Minutes after filing, according to the states, they sent lawyers for Nexstar and Tegna a copy of the complaint and “asked Defendants to enter into a Stipulated Timing Agreement under which Nexstar and Tegna would agree not to consummate the challenged Transaction until after a final judgment was issued in this case.”
However, “Defendants failed to even acknowledge Plaintiffs’ request,” the states’ motion says. “Instead, in the late afternoon yesterday, March 19, Nexstar closed its acquisition of Tegna, immediately following announcements of regulatory approval from the Federal Communications Commission (‘FCC’) and the U.S. Department of Justice’s (‘U.S. DOJ’) decision to close its investigation into the Transaction early.”
The decision by Nexstar and Tegna to close “despite multiple pending lawsuits, their non-responsiveness to counsel’s inquiries, and their rush to consummate the Transaction raise the troubling specter that Defendants may be barreling forward with this transaction to frustrate effective judicial review.”
The states’ lawsuit alleges a combined Nexstar-Tegna would create a “broadcasting behemoth with control over an unprecedented share of broadcast television content, including local news and sports, from the nation’s most-watched ‘Big 4’ stations (those affiliated with FOX, ABC, NBC or CBS).” Such an entity also would have “more substantial power to raise prices for cable, satellite, and fiber-optic television consumers, and to control and degrade the quality and variety of broadcast television content.”
A copy of the state AGs’ motion for a temporary restraining order is at this link.
Leave a Reply