Category: News

UPDATED, WITH Nexstar comment: Nexstar officials cannot serve on the board of Tegna as an order remains in place to keep the two companies separate, a federal judge ruled on Thursday.

U.S. District Judge Troy Nunley clarified that his preliminary injunction, issued in April, prohibited current and former Nexstar “officers, employees, directors, consultants, or other affiliated personnel” from serving on Tegna’s board. He wrote that Nexstar had to file a report within 10 days to ensure compliance.

“It is shocking that Defendants think installing a Board of Directors comprised primarily of Nexstar executives would not create influence over Tegna management,” the judge wrote. “This undermines Tegna as an independent entity and violates the preliminary injunction.”

The judge also admonished Nexstar for their “lack of candor,” pointing to their lack of disclosure of the fact that three Nexstar officials, including CEO Perry Sook, were appointed to the Tegna board.

“Defendants repeatedly failed to disclose material information to this Court, declined to seek Court guidance or relief, and then publicly declared that the Court had ‘approved’ their actions,” the judge wrote.

A coalition of state attorneys general and DirecTV sued to block the Nexstar-Tegna merger in March. In the next 24 hours, the FCC gave its greenlight to the transaction, and Nexstar closed the deal soon after that.

Nunley later granted a preliminary injunction that requires that the Nexstar and Tegna assets and operations be kept separate.

The plaintiffs last month objected to the presence of Nexstar officials serving on Tegna’s board, including Nexstar CEO Perry Sook.

In his order, Nunley also ordered a set of steps to ensure compliance, including providing board minutes and other documents to the plaintiffs on a monthly basis. He also directed the parties to file a stipulation and proposed order to potentially appoint a special master to oversee compliance. The judge wrote that Nexstar’s actions “violated the preliminary injunction as clarified. Therefore, ongoing compliance monitoring and discovery is warranted in this case to ensure adherence to the preliminary injunction, particularly in light of Defendants’ lack of candor.”

A Nexstar spokesperson said in a statement, “We will comply with the court’s order, including its requirements regarding Tegna’s Board and the compliance process going forward. We remain focused on defending the transaction on the merits and strengthening local broadcasting for communities across America.”

Nexstar is appealing the preliminary injunction, with oral arguments expected in November or December. A trial is on the docket for next year. The company had argued that its executives must sit on the Tegna board to fulfill
Sarbanes-Oxley Act requirements and debt agreement obligations, but the judge wrote that he was not persuaded.

The company said in a statement last month that it “has scrupulously complied with the Court’s hold-separate order. Tegna continues to operate independently, and Nexstar has no involvement in Tegna’s retransmission consent negotiations, content decisions, staffing, or other day-to-day operations.  Nexstar’s executives’ service on Tegna’s Board is consistent with the Court’s order and is critical to ensuring that Nexstar can continue to satisfy its financial reporting obligations while the hold-separate requirements are in place.”

The plaintiffs argued that “antitrust law prohibits executives of one company from serving on the board of a competing company because doing so would enable a company to influence its competitor and access its confidential information — exactly what this Court’s preliminary injunction seeks to prevent.”

UPDATED, with reaction: The FCC removed a key constraint on broadcasters’ ability to consolidate stations, voting to repeal an ownership cap put in place to try to limit power of any one media company.

The FCC’s 2-1 vote Thursday was to repeal a restriction that limits companies from owning stations reaching more than 39% of TV households. But it faces a potential court challenge, amid warnings that only Congress has the authority to remove the restriction.

FCC chairman Brendan Carr said that the move was long overdue given the dramatic changes to the competitive landscape, warning that inaction risked seeing local stations “going the way of newspapers.”

“It is time to restore balance to the broadcast airwaves,” Carr said. “Repealing the national cap will provide essential relief for local broadcasters by restoring a healthy counterbalance to the growing leverage of national programmers.”

He predicted that allowing broadcasters to increase scale will allow them to attract capital and boost advertising to produce news and other local programming.

Removal of the cap — which limits any company from collecting stations that reach more than 39% of the country — has long been a goal of broadcasters, who have complained that they have been unable to scale up to compete with unregulated tech giants as they have siphoned off local television advertising revenue. The FCC move was quickly praised by the main broadcast lobby, the National Association of Broadcasters.

Nexstar Media Group has been among the companies championing the repeal of the cap, having already obtained a waiver from the FCC’s media bureau to merge with Tegna, a transaction creating a broadcast giant with around 260 stations covering 80% of the country. The merger closed, but Nexstar has been ordered by a judge to keep the assets and operations separate amid an antitrust lawsuit brought by state attorneys general and DirecTV.

Anna Gomez, the sole Democrat on the FCC, said in a statement today, “The large station groups positioned to grow even larger under this decision are not local broadcasters, they are national companies that own local stations and increasingly dictate what airs on them. Trading a squeeze from Big Tech for a squeeze from Big Media does nothing to protect the communities this cap was designed to serve.” She warned of shrinking newsrooms, as large station groups seek efficiencies in local operations.

Skepticism of the FCC’s action crosses party lines. Sen. Ted Cruz (R-TX) has said that he has doubts that the FCC can repeal the cap on its own, and Michael O’Rielly, a former Republican commissioner, has said that the authority lies with Congress as it was a statute. Former House Majority Leader Tom DeLay, in a recent op-ed, wrote of how he negotiated the 39% figure in a 2004 appropriations bill. “Regulatory agencies cannot defy or modify laws enacted by Congress,” DeLay wrote for The Daily Wire.

Newsmax CEO Chris Ruddy told a congressional hearing earlier this year that he was “prepared to litigate” over the FCC’s action, arguing that the TV industry “is too important to be handed over to a small number of conglomerates.”

The FCC under Carr has argued that while Congress “has at times directed the Commission to change our rules, it has never withdrawn our authority under the Communications Act to regulate or change ownership limits.” In its order, the FCC claimed that Congress’ 2004 action was a directive only for the commission to “modify its rules.” The agency also cited a 2002 appellate court decision that characterized a specified percentage for the cap as a “starting point from which the Commission was to assess the need for further change.”

Major station groups were praising the FCC’s action even before the vote. Chris Ripley, the CEO of Sinclair Broadcast Group, said on an earnings call Wednesday, “We fully expect people to challenge this order, and we think the FCC is on solid legal ground here in terms of their authority to change this rule and the rationale behind changing it. The FCC’s mandate is to deregulate over time. That was the mandate from Congress, as conditions change, and that’s what’s happening here.”

With the cap repealed, the FCC will shift to a case-by-case review of merger transactions that otherwise would exceed the 39% threshold. Carr has said that a rationale behind removing the cap was to bolster local TV station groups in the leverage against major broadcast networks. That raises the prospect that some companies will get the greenlight and others, like networks with a national footprint, will not.

“Congress never envisioned that local broadcast TV stations would become nothing more than undifferentiated passthroughs of national programming produced in Hollywood and New York,” Carr said on Thursday. “But if the FCC does not change course, this could become the reality in many towns and cities and counties.”

In announcing the plans, the FCC stated, “There may be transactions that would have exceeded the limits of
the 39% national cap that do not promote the public interest and those will be denied. On the other
hand, there may be transactions that would have exceeded the cap that do promote the public interest
and could gain Commission approval.”

The FCC’s vote came around the same time that Nexstar was hosting an earnings call. Its CEO, Perry Sook, said that the repeal “will remove a certain level of uncertainty in future M&A,” and that it would allow broadcasters to “compete on the same playing field in the domestic U.S. with every other purveyor of advertising, and every other purveyor of video that we compete with that has access to 100% of U.S. households.”

But he said that the move may not have a big impact on the Nextstar-Tegna merger lawsuit, as it’s “more about antitrust than the national ownership cap.”

Sen. Elizabeth Warren (D-MA) warned that the FCC action was an effort to “illegally rewrite the rules to make it easier for billionaires to line their own pockets while jacking up costs and controlling what Americans watch. After rubber-stamping the Nexstar-Tegna megamerger, this looks like the Trump administration’s latest attempt to roll out the red carpet for more antitrust disasters.”

A federal judge stayed an order to compel Donald Trump‘s trust to provide financial documents to the BBC, which the president is suing in a $10 billion defamation claim.

U.S. District Judge Roy Altman set aside for now a magistrate’s order that the Donald J. Trump Revocable Trust produce documents dating back to Jan. 1, 2023.

The BBC argued that the documents were relevant as Trump had claimed damages to his brands and businesses. Altman noted that Trump’s attorney no longer intends to pursue damages premised on harm to the businesses, granting the stay until the court rules on whether an amended lawsuit can be filed.

RELATED: FCC Removes Key Limit On Media Ownership, Raising Potential For Major Consolidation Of Broadcast TV Stations

Trump sued the BBC in December over edits that were made in a documentary about the January 6th attack on the Capitol.

In the documentary, Trump: A Second Chance?, a clip is shown from his January 6 speech, in which he says, “We’re going to walk down to the Capitol … and I’ll be there with you. And we fight. We fight like hell.” In fact, the remark was an edit of different portions of the speech. The documentary aired on Oct. 28, 2024.

The BBC opposes Trump’s effort to amend his complaint, calling it a “transparent effort to avoid the imminent court-ordered deadline to begin producing financial discovery.” Trump’s legal team contend that the revisions “further crystallize and focus this case.”