A coalition of 13 attorneys general joined DirecTV on Wednesday in accusing Nexstar of violating an injunction by appointing Tegna board members.
The two television station groups were ordered in April to halt the merger and remain independent pending the outcome of an antitrust case. However, Nexstar subsequently appointed current and former executives of its own company to Tegna’s board of directors, which the plaintiffs claim is not authorized by the order.
“Nexstar cannot simultaneously control TEGNA’s board of directors and comply with an injunction requiring TEGNA to remain independent,” the plaintiffs wrote. “This should have been obvious.”
The plaintiffs asked Judge Troy Nunley, who issued the order, to clarify that Nexstar is not allowed to oversee Tegna’s operations in this way.
In response, Nexstar said it had “scrupulously complied with the court’s pending separation 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,” the company said. “The service of Nexstar executives on TEGNA’s board of directors is consistent with the court order and is critical to ensuring that Nexstar continues to meet its financial reporting obligations while the pending separation requirements are in place.”
Nexstar has appealed the injunction to the Ninth Circuit and is awaiting a ruling.
In their complaint, the plaintiffs point to comments made in May by Nexstar CEO Perry Souk, in which he said Tegna would operate as a subsidiary of Nexstar and that management would report to the board of directors.
These comments prompted the plaintiffs to seek further information about how the company was run. The motion alleges that Nexstar has refused to provide certain information or answer questions, and has similarly refused to remove executives from Tegna’s board of directors.
“The stakes here are high. Further consolidation is contrary to court directives and, if allowed, would negate Nexstar and Tegna’s ability to control prices, raise prices, lay off journalists, and dominate the broadcast media world,” California Attorney General Rob Bonta said in a statement.
The motion also asks the judge to order expedited discovery and monthly updates to the court on Tegna’s business performance.
The states argue that the merger would give Nexstar undue influence in retransmission negotiations with cable and satellite distribution companies, leading to higher prices for consumers. The complaint also alleges that the merger will lead to a decline in independent local news outlets, stating that “local news coverage is critical to challenges to local newspapers and the ability of an informed public to participate in local news.”
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