A federal judge has blocked Nexstar Media Group’s $6.2-billion acquisition of its rival, upending the already consummated union of the nation’s two largest television station groups.
U.S. District Court Chief Judge Troy L. Nunley on Friday issued a preliminary injunction that forbids Nexstar, which owns KTLA-TV Channel 5 in Los Angeles, and its takeover-target, Tegna Inc., from combining operations amid a legal dispute with California Atty. Gen. Rob Bonta and seven other state attorneys general.
The order takes effect on Tuesday.
“Nexstar must permit Tegna to continue operating as a separate and distinct, independently managed business unit from Nexstar,” Nunley wrote. “And Nexstar must put measures in place to maintain Tegna as an ongoing, economically viable, and active competitor.”
The injunction is Nexstar’s latest setback in the controversial deal championed by President Trump.
Bonta and the others are opposed to the merger, arguing it violates a 112-year-old U.S. anti-trust law by knocking out a major competitor . The deal would give Irving, Texas-based Nexstar control of 265 television stations across the country, up from 164. And, in dozens of markets, including San Diego and Sacramento, Nexstar would own multiple TV network affiliates.
That duplication has raised concerns about staff consolidations and widespread newsroom layoffs.
“This is a critical win in our case,” Bonta said in a statement. “This merger is illegal, plain and simple. 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.”
Bonta and other state attorneys general sued to block the merger March 18. The state officials, all Democrats, alleged the union would create “a broadcast behemoth” with the “power to raise prices for television consumers” and diminish “local news and sports,” their lawsuit stated.
El Segundo-based DirecTV separately sued. It alleged the merger would dramatically tilt the pay-TV playing field, forcing DirecTV to pay dramatically higher fees for the rights to carry Nexstar-Tegna station programming, including local news and NFL football. Those costs, DirecTV said, would be passed along to its 10 million customers.
Trump had been agitating for the deal, writing in a February social media post: “GET THAT DEAL DONE!”
On March 19, the day after the flurry of lawsuits, the Trump administration approved the deal. The U.S. Justice Department terminated its antitrust review and the Federal Communications Commission’s Media Bureau authorized the transfer of Tegna’s station licenses to Nexstar.
Within an hour, Nexstar announced that it had finalized the purchase of its McLean, Va.-based rival.
Tegna, as corporation, was dissolved and its stockholders were paid out — raising questions about what happens next and how Tegna stations will be governed while the dispute unfolds in court.
“Nexstar must not influence the management of the held-separate TEGNA business unit,” Nunley wrote. “Tegna personnel must maintain control over Tegna’s decisionmaking, including … negotiations [with pay-TV partners], newsroom personnel, operations and programming, product and service offerings, product development, advertisement sales, and personnel.”
Nexstar has complained about the unusual nature of blocking a transaction after-the-fact. But the plaintiffs noted that Nexstar had been aware of the state attorneys general concerns since at least March 10 — more than a week before DirecTV and the state regulators sued.
Colorado, Connecticut, Illinois, New York, North Carolina, Oregon and Virginia have joined California in the lawsuit.
The merger was not approved by the full FCC commission, prompting two U.S. senators — Ted Cruz (R-Texas) and Maria Cantwell (D-Wash.) — to question the FCC’s handling of the matter.
“This decision raises serious concerns about the Commission’s use of delegated authority in matters involving significant legal, policy, and economic consequences,” the two lawmakers wrote in a March 30 letter to the FCC. “The transaction is unprecedented in scale, resulting in the largest local broadcast television group in U.S. history.”
Nexstar has built itself into a colossus through a series of acquisitions. The most prominent was its $6.2-billion takeover of Tribune Broadcasting, the longtime owner of KTLA, in 2019 — during the first Trump term.
Opponents have argued that Nexstar’s proposed purchase of Tegna was problematic because it gives Nexstar stations in 44 states covering 80% of the U.S. population — exceeding a 39% ownership cap set by Congress.
DirecTV has argued that the combination of the nation’s two largest television station groups could harm its pay-TV business by raising prices for consumers and potentially increasing programming blackouts.
The judge late last month combined the two lawsuits.
During a two-hour hearing earlier this month, Nexstar attorneys argued against the injunction, saying it had obtained the necessary federal approvals to take control of the Tegna stations.
“Setting aside the unusual FCC clearance process here, the Court does not find Defendants’ arguments persuasive,” Nunley wrote.
Nexstar contends the deal would strengthen TV station economics, allowing stations to bolster their news gathering and expand the number of newscasts. But DirecTV countered that in markets where Nexstar owns two stations, it relies on just one newsroom to program both channels.
Nexstar attorney Alexander Okuliar said the plaintiffs failed to demonstrate that the merger posed an immediate threat to the public.
Nunley, who was elevated to the federal bench by former President Obama, wrote in his order that the plaintiffs demonstrated they had a path to prevail at a trial due to the merits of their arguments.
Nexstar is expected to appeal Nunley’s injunction.
Nexstar had asked the judge to require the plaintiffs to post a $150-million bond to compensate it for damages it would suffer from any delays in closing the deal.
But the judge denied that request, writing that Nexstar did not offer a “financial analysis or documentary evidence to support a bond in this amount” or any evidence that it would incur financial losses should the injunction be overturned.
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