A federal judge has blocked Nexstar Media Group\u2019s $6.2-billion acquisition of its rival, upending the already consummated union of the nation\u2019s two largest television station groups.<\/p>\n
U.S. District Court Chief Judge Troy L. Nunley on Friday issued a preliminary injunction that forbids Nexstar, which owns KTLA-TV Channel 5<\/a> in Los Angeles, and its takeover-target, Tegna Inc., from combining operations amid a legal dispute with California Atty. Gen. Rob Bonta and seven other state attorneys general.<\/p>\n The order takes effect Tuesday.<\/p>\n \u201cNexstar must permit Tegna to continue operating as a separate and distinct, independently managed business unit from Nexstar,\u201d Nunley wrote in his 52-page order. \u201cAnd Nexstar must put measures in place to maintain Tegna as an ongoing, economically viable, and active competitor.\u201d<\/p>\n The injunction is Nexstar\u2019s latest setback in the controversial deal<\/a> championed by President Trump. <\/p>\n Bonta and the others are opposed to the merger, arguing it violates a 112-year-old U.S. antitrust law by knocking out a major competitor. The deal would give Irving, Texas-based Nexstar control of 265 television stations across the country, up from 164. And, in dozens of markets, including San Diego and Sacramento, Nexstar would own multiple TV network affiliates.<\/p>\n That duplication has raised concerns about staff consolidations and widespread newsroom layoffs<\/a>.<\/p>\n \u201cThis is a critical win in our case,\u201d Bonta said in a statement. \u201cThis merger is illegal, plain and simple. The federal government may have thrown in the towel, but we\u2019ll keep fighting for consumers, for workers, for affordability and for our local news.\u201d<\/p>\n Nexstar, in a statement, said that it will appeal the ruling, but that it has taken steps to comply with the court order. <\/p>\n \u201cFor nearly thirty years, Nexstar has provided free over-the-air access to all its broadcast stations \u2014 local news, weather, and community-focused programming alongside major network programming,\u201d Nexstar said. \u201cThis procompetitive transaction will make local stations stronger and support continued investment in local journalism and fact-based news.\u201d<\/p>\n Bonta and other state attorneys general sued to block the merger<\/a> March 18. The state officials, all Democrats, alleged the union would create \u201ca broadcast behemoth\u201d with the \u201cpower to raise prices for television consumers\u201d and diminish \u201clocal news<\/a> and sports,\u201d their lawsuit stated. <\/p>\n El Segundo-based DirecTV separately sued. It alleged the merger would dramatically tilt the pay-TV playing field, forcing DirecTV to pay dramatically higher fees for the rights to carry Nexstar-Tegna station programming, including local news and NFL football. Those costs, DirecTV said, would be passed along to its 10 million customers.<\/p>\n Trump had been agitating for the deal, writing in a February social media post: \u201cGET THAT DEAL DONE!\u201d <\/p>\n On March 19, the day after the lawsuits, the Trump administration approved the deal. The U.S. Justice Department terminated its antitrust review and the Federal Communications Commission\u2019s Media Bureau authorized the transfer of Tegna\u2019s station licenses to Nexstar. <\/p>\n Within an hour, Nexstar announced that it had finalized the purchase<\/a> of its McLean, Va.-based rival. <\/p>\n Tegna was dissolved and its stockholders were paid out \u2014 raising questions about the fate of Tegna\u2019s stations. <\/p>\n \u201cNexstar must not influence the management of the held-separate TEGNA business unit,\u201d Nunley wrote. \u201cTegna personnel must maintain control over Tegna\u2019s decisionmaking, including … negotiations [with pay-TV partners], newsroom personnel, operations and programming, product and service offerings, product development, advertisement sales, and personnel.\u201d<\/p>\n Nexstar has complained about the unusual nature of blocking a transaction after-the-fact. But the plaintiffs noted that Nexstar had been aware of the state attorneys general concerns since at least March 10 \u2014 more than a week before DirecTV and the state regulators sued. <\/p>\n Colorado, Connecticut, Illinois, New York, North Carolina, Oregon and Virginia have joined California in the lawsuit.<\/p>\n The merger was not approved by the full FCC commission, prompting two U.S. senators \u2014 Ted Cruz (R-Texas) and Maria Cantwell (D-Wash.) \u2014 to question the FCC\u2019s handling of the matter.<\/p>\n \u201cThis decision raises serious concerns about the Commission\u2019s use of delegated authority in matters involving significant legal, policy, and economic consequences,\u201d the two lawmakers wrote in a March 30 letter to the FCC. \u201cThe transaction is unprecedented in scale, resulting in the largest local broadcast television group in U.S. history.\u201d<\/p>\n Nexstar has built itself into a colossus through a series of acquisitions, including its $6.2-billion takeover of Tribune Broadcasting, the longtime owner of KTLA, in 2019 \u2014 during the first Trump term. <\/p>\n Opponents have argued that Nexstar\u2019s proposed purchase of Tegna gives Nexstar stations in 44 states covering 80% of the U.S. population \u2014 exceeding a 39% ownership cap<\/a> set by Congress.<\/p>\n DirecTV has argued that the combination of the nation\u2019s two largest television station groups could harm its pay-TV business by raising prices for consumers and potentially increasing programming blackouts.<\/p>\n The judge late last month combined the two lawsuits.<\/p>\n During a two-hour hearing earlier this month, Nexstar attorneys argued against the injunction, saying it had obtained the necessary federal approvals to take control of the Tegna stations. <\/p>\n \u201cSetting aside the unusual FCC clearance process here, the Court does not find Defendants\u2019 arguments persuasive,\u201d Nunley wrote. <\/p>\n Nexstar contends the deal would strengthen TV station economics<\/a>, allowing stations to bolster their news gathering<\/a> and expand the number of newscasts. But DirecTV countered that in markets where Nexstar owns two stations, it relies on just one newsroom to program both channels. <\/p>\n \u201cWe commend the Court\u2019s decision, which reinforces the coalition of states\u2019 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,\u201d DirecTV said in a statement.<\/p>\n Nexstar attorney Alexander Okuliar said the plaintiffs failed to demonstrate that the merger posed an immediate threat to the public. <\/p>\n Nunley, who was appointed by former President Obama, wrote in his order that the plaintiffs demonstrated they had a path to prevail at a trial due to the merits of their arguments.<\/p>\n Nexstar had asked the judge to require the plaintiffs to post a $150-million bond to compensate it for damages it would suffer from any delays in closing the deal.<\/p>\n But the judge denied that request, writing that Nexstar did not offer a \u201cfinancial analysis or documentary evidence to support a bond in this amount\u201d or any evidence that it would incur financial losses should the injunction be overturned. <\/p>\n","protected":false},"excerpt":{"rendered":"A federal judge has blocked Nexstar Media Group\u2019s $6.2-billion acquisition of its rival, upending the already consummated union…\n","protected":false},"author":2,"featured_media":273766,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[27],"tags":[118633,26033,16047,48,52,51,118635,1846,23,47,50,49,2959,49397,88347,118634,113582,1437,3153,103110,17281],"class_list":["post-273765","post","type-post","status-publish","format-standard","has-post-thumbnail","category-los-angeles","tag-controversial-deal","tag-directv","tag-judge","tag-la","tag-la-headlines","tag-la-news","tag-large-television-station-group","tag-lawsuit","tag-local-news","tag-los-angeles","tag-los-angeles-headlines","tag-los-angeles-news","tag-march","tag-merger","tag-nexstar","tag-nexstar-control","tag-nunley","tag-plaintiff","tag-preliminary-injunction","tag-tegna","tag-u-s-senator"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts\/273765","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/comments?post=273765"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts\/273765\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/media\/273766"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/media?parent=273765"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/categories?post=273765"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/tags?post=273765"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}