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 prevent the TV station group from merging.
Late Friday, Judge Troy Nunley of the U.S. District Court for the Eastern District of California issued a 52-page ruling that upheld DirecTV’s argument that allowing Nexstar to consolidate Tegna’s 64 stations could cause “irreparable harm” to DirecTV. Nexstar has said it will appeal.
Nexstar announced on March 19 that it had completed its acquisition of Tegna, despite lawsuits in California and other states seeking to block the deal. On the surface, Nexstar’s absorption of Tegna would put the combined company beyond the FCC’s existing limits on the number of television stations a single entity can own. However, the FCC is actively reviewing these ownership restriction rules. Nexstar went ahead with its Tegna acquisition on a bold bet that the rules would change and the merger would get federal approval, and it did. The FCC and the Department of Justice gave the go-ahead for the deal. But eight state attorneys general and DirecTV are strongly opposed.
On March 27, Nunley filed a temporary restraining order against Nexstar Integration. The preliminary injunction reinforces a court order requiring Nexstar to cease all integration efforts with Tegna. The ruling also examines the deal’s impact on local news, given Nexstar’s history of consolidating coverage across markets and regions. The merger’s impact on local news is a major focus of lawsuits filed by Bonta and the states of New York, Colorado, Illinois, Oregon, North Carolina, Connecticut and Virginia.
For DirecTV, the focus is on expanding Nexstar’s ability to increase the retransmission agreement rates it charges cable operators and satellite providers like DirecTV to carry local stations.
“The court agrees with plaintiffs that defendants’ consolidation efforts are precisely what will make the sale of Tegna Broadcasting more difficult, as they will eliminate competition and lead to newsroom layoffs and closures,” Nunley wrote. “The Court also notes that Plaintiffs filed their instant action prior to Defendants’ consummation of the transaction. Therefore, Defendants could have waited seven days to complete the acquisition or begin integration efforts before this Court rendered judgment on Plaintiffs’ TRO application. Accordingly, the Court agrees with Plaintiffs, especially given the fact that it is in the public interest to increase Plaintiffs’ chances of success based on their claims and to establish an injunction. The personal benefits of acquiring Tegna outweigh the harm to Plaintiffs.”
Nexstar is the nation’s largest television station owner with approximately 200 stations nationwide. Tegna owns Big 4 network affiliate stations in major and mid-major television markets including Washington, DC, Houston, Dallas, Seattle, Denver and Phoenix.
“This transaction was completed over four weeks ago after receiving all necessary regulatory approvals.”
From the Federal Communications Commission and the U.S. Department of Justice. “Nexstar Media Group currently owns Tegna and is taking steps consistent with the court order currently in effect. For nearly 30 years, Nexstar has provided free over-the-air access to all of its stations, including local news, weather, and community-focused programming, along with major network programming,” Nexstar said in a statement. This pro-competition deal strengthens local stations and supports continued investment in local journalism and fact-based news. We look forward to appealing today’s ruling and presenting the merits of the case to the Ninth Circuit Court of Appeals. ”
Meanwhile, DirecTV was quick to praise Nunley’s ruling.
“We applaud the court’s decision, which strengthens the coalition of states and our shared belief that unchecked broadcast consolidation will force consumers to pay more for less by reducing the quality and diversity of local news coverage, soaring content prices, and increasing the threat of broadcast blackouts.” “DirecTV remains committed to providing a competitive, diverse and affordable media environment for all Americans.”
California Attorney General Rob Bonta called Nunley’s decision a “significant victory” for the plaintiffs.
“My office and attorneys general across the country have obtained a preliminary injunction in our lawsuit challenging the illegal and Department of Justice-approved merger of Nexstar and Tegna. This is an order requiring the major broadcasters to halt the merger while the litigation proceeds. This is an important 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.”
