A federal judge in Sacramento has issued a preliminary injunction against Nexstar‘s acquisition of Tegna TV stations as part of DirecTV‘s lawsuit to block the merger of TV station groups.
U.S. District Court Judge Troy Nunley of California’s Eastern District issued the 52-page ruling late Friday, siding with DirecTV’s argument that allowing Nexstar to move forward with its integration of Tegna’s 64 stations could bring “irreparable harm” to DirecTV. Nexstar has vowed to appeal.
On March 19, Nexstar announced its acquisition of Tegna was complete despite the litigation in California and other states to block the deal. On its face, Nexstar’s absorption of Tegna puts the combined company beyond the FCC’s existing limits on the number of TV stations that a single entity can own. But the FCC is actively reviewing those ownership limit rules. Nexstar moved forward with its purchse of Tegna in a bold gamble that the rules would be changed and thus the merger would win federal approval, which it did. The FCC and Justice Department gave their greenlights to the purchase. But eight state attorneys general and DirecTV are pushing back hard.
On March 27, Nunley granted a temporary restraining order against Nexstar’s integration. The preliminary injunction strengthens the court order for Nexstar to halt all integration efforts with Tegna. The ruling also explores the impact of the deal on local news, given that Nexstar has a history of consolidating newsgathering activity across markets and regions. The impact of the merger on local news is the primary focus of the lawsuit filed by Bonta and his counterparts in New York, Colorado, Illinois, Oregon, North Carolina, Connecticut, and Virginia.
For DirecTV, the focus is on the enlarged Nexstar’s ability to raise the retransmission consent rates that it charges cable operators and satellite providers such as DirecTV to carry its local stations.
“The Court agrees with Plaintiffs that Defendants’ integration efforts are exactly those that would make it more difficult to divest Tegna stations, as they will eliminate competition and result in newsroom layoffs and shutdowns,” Nunley wrote. “The Court also notes Plaintiffs filed the instant suits prior to Defendants’ consummation of the Transaction. Accordingly, Defendants could have waited seven days to complete the acquisition or begin integration efforts until after this Court ruled on Plaintiffs’ motions for TRO. Therefore, especially in light of the fact that Plaintiffs raise a likelihood of success on the merits of their claims and establish an injunction is in the public interest, the Court agrees with Plaintiffs that the private benefits Nexstar could obtain by acquiring Tegna are outweighed by the harm to Plaintiffs.”
Nexstar is the nation’s largest TV station owner with nearly 200 outlets across the country. Tegna owns Big Four network affiliate stations in key major and medium-size TV markets including Washington, D.C., Houston, Dallas, Seattle, Denver and Phoenix.
“This transaction closed more than four weeks ago following receipt of all required 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 that has been in effect,” Nexstar said in a statement. “For nearly thirty years, Nexstar has provided free over-the-air access to all its broadcast stations — local news, weather, and community-focused programming alongside major network programming. This procompetitive transaction will make local stations stronger and support continued investment in local journalism and fact-based news. We will appeal today’s decision and look forward to presenting our case on its merits before the Ninth Circuit Court of Appeals.”
DirecTV, on the other hand, was quick to praise Nunley’s ruling.
“We commend the court’s decision, which reinforces the coalition of states’ and our shared belief that unchecked station consolidation will force consumers to pay more for less by reducing the quality and variety of local news coverage, driving up content prices, and increasing the threat of station blackouts,” DirecTV said. “DirecTV remains committed to a competitive, diverse, and affordable media landscape for all Americans.”
Rob Bonta, California’s Attorney General, called Nunley’s ruling “a critical win” for the plaintiffs.
“My office and attorneys general nationwide have secured a preliminary injunction in our lawsuit opposing the illegal and U.S. DOJ-approved merger of Nexstar/Tegna — an order that demands the broadcasting titans stop merging while our case proceeds. This is a critical win in our case,” Bonta said. “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.”
