Judge Blocks Nexstar-Tegna Merger Until Antitrust Suit Is Resolved

A federal judge late Friday blocked Nexstar Media Group’s $6.2 billion takeover of local-television rival Tegna until an antitrust lawsuit is resolved, NPR and the Associated Press reported.

Chief Judge Troy Nunley of the U.S. District Court in Sacramento issued a preliminary injunction, finding that eight attorneys general, all Democrats, and satellite provider DirecTV were likely to win their bid to stop the deal. Under the order, Nexstar must run the Tegna stations it has already acquired separately while the case proceeds, NPR reported. If Nexstar ultimately loses, it could be forced to unwind the deal, NPR said. Nexstar said Friday evening that it would appeal to the Ninth Circuit.

The combined company would own 265 stations in 44 states and the District of Columbia, most affiliated with ABC, CBS, Fox or NBC, according to the AP and NPR. NPR reported that this equals about 15 percent of all local stations but reaches 80 percent of U.S. households. Nunley wrote that the size would likely let Nexstar raise the retransmission fees it charges distributors such as DirecTV, leading to higher consumer bills, and that viewers “will lose options for where to get their local news,” the AP reported. The judge said stopping the merger for now is “in the public interest.”

Nunley was pointed about the approval process. The AP reported that the deal needed the Trump administration’s Federal Communications Commission to waive limits on how many local stations one company can own, and that the Justice Department closed its review in March through “early termination.” The judge called the FCC process “unusual” and wrote that the oversight “did not curb the manifest anticompetitive effects of this acquisition.” He noted that President Trump publicly urged regulators in February to approve the deal to “knock out the Fake News.” NPR said Mr. Trump and FCC Chairman Brendan Carr endorsed the deal publicly that month, and that Nexstar closed the transaction hours after receiving approval.

Nexstar’s lawyers told the court that the FCC and the Justice Department had reviewed and cleared the deal and that the FCC order commits the company to expand local journalism and programming, not shrink it, the AP reported. Carr said in March that Nexstar had agreed to sell six stations. The company has told investors it expects $300 million a year in savings from integrating Tegna, which the attorneys general point to as a sign of likely layoffs and merged newsrooms, NPR reported.

New York Attorney General Letitia James called the ruling a “critical victory,” and said that consolidating hundreds of local stations under one owner “would mean higher prices and lower quality programming for consumers,” according to the AP. DirecTV argues that Nexstar would gain leverage in fee negotiations, a claim Nexstar disputes, NPR reported.