Federal judge issues preliminary injunction against Nexstar-Tegna Pact

A federal judge in Sacramento has issued a preliminary injunction nexdaacquisition Label TV station as live tvLawsuit to block TV station group merger.

U.S. District Judge Troy Nunley of the Eastern District of California issued the 52-page ruling late Friday, supporting DirecTV’s argument that allowing Nexstar to continue integrating Tegna’s 64 stations could cause “irreparable harm” to DirecTV. Nexstar vowed to appeal.

On March 19, Nexstar announced the completion of its acquisition of Tegna, despite lawsuits filed by California and other states to block the deal. On the surface, Nexstar’s absorption of Tegna would allow the combined company to exceed the FCC’s existing limits on the number of television stations a single entity can own. But the FCC is actively reviewing these ownership limits rules. Nexstar moved forward with its acquisition of Tegna, a bold gamble that the rules would be changed so that the merger would win federal approval, and it did. The Federal Communications Commission and the Department of Justice approved the acquisition. But eight state attorneys general and DirecTV are pushing back hard.

On March 27, Nunley issued a temporary restraining order against Nexstar’s integration. The preliminary injunction reinforces the court’s order that Nexstar cease all integration efforts with Tegna. The ruling also explores the impact of the deal on local news, given Nexstar’s history of consolidating news gathering activities across markets and regions. The merger’s impact on local news is the main focus of lawsuits filed by Bonta and his counterparts in New York, Colorado, Illinois, Oregon, North Carolina, Connecticut and Virginia.

For DirecTV, the focus is on the expanded Nexstar’s ability to increase rebroadcast consent rates, with the company charging cable operators and satellite providers like DirecTV to rebroadcast its local stations.

“The court agrees with plaintiffs that defendants’ consolidation efforts will precisely make it more difficult to divest Tegna stations because they will eliminate competition and result in newsroom layoffs and closings,” Nalley wrote. “The Court also notes that Plaintiffs filed suit immediately before Defendants completed the transaction. As a result, Defendants could have waited seven days to complete the acquisition or begin integration efforts until this Court ruled on Plaintiffs’ TRO motion. Therefore, particularly given that Plaintiffs argued that there was a likelihood of success based on their claims and that an injunction was in the public interest, the Court agreed with Plaintiffs that private interests benefited Nexstar.

Nexstar is the largest television station owner in the United States, with nearly 200 stations nationwide. Tegna owns four network-affiliated stations in key mid-sized television markets including Washington, D.C., Houston, Dallas, Seattle, Denver and Phoenix.

“The transaction was completed four weeks ago after receiving all necessary 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 in effect,” Nexstar said in a statement. “For nearly three decades, Nexstar has provided free wireless access to all of its broadcast stations – local news, weather and community-focused programming as well as major network programming. This pro-competitive deal will make local stations even stronger and support continued investment in local journalism and fact-based news. We will appeal today’s decision and look forward to presenting the case on the merits before the Ninth Circuit Court of Appeals.”

DirecTV, on the other hand, was quick to praise Nalley’s ruling.

“We applaud the court’s ruling, which strengthens states’ alliances and reinforces our shared belief that unchecked station consolidation will reduce the quality and variety of local news coverage, drive up content prices, and increase the threat of station blackouts, forcing consumers to pay less,” DirecTV said. “DirecTV remains committed to a competitive, diverse and affordable media environment for all Americans.”

California Attorney General Rob Bonta called Nalley’s ruling “a critical victory” for the plaintiffs.

“My office and the nation’s attorneys general have obtained a preliminary injunction in our lawsuit against the illegal Nexstar/Tegna merger approved by the U.S. Department of Justice. This order requires the broadcast giant to stop the merger while our case continues. This is a key victory in our case,” Bonta said. “This merger is illegal, plain and simple. The federal government may have thrown in the towel, but we will continue to fight for consumers, workers, affordability and local news.”