A federal judge has blocked a $6.2 billion merger of local television giants Nexstar Media Group and rival Tegna until an antitrust lawsuit is resolved.
U.S. District Court Chief Judge Troy L. Nunley in Sacramento, California, made the ruling late Friday afternoon, finding that eight attorneys general and DirecTV were likely to prevail in their legal bid to stop the merger. The attorneys general, all Democrats, and DirecTV contend the merger will lead to higher prices for consumers, stifle local journalism and that the deal runs afoul of federal laws designed to protect against monopolies.
The deal, announced last year and approved by the Federal Communications Commission, would create a company that owns 265 television stations in 44 states and the District of Columbia, most of them local affiliates of one of the “Big Four” national networks: ABC, CBS, Fox and NBC.
That would likely give Nexstar the power to raise the retransmission fees it charges to video programming distributors like DirecTV, which means higher bills for consumers, Nunley wrote. The company also has a track record of consolidating local television news stations when it owns more than one station in a market, the judge said, meaning viewers “will lose options for where to get their local news.”
The deal could also force distributors like DirecTV to comply with Nexstar’s demands for higher broadcast fees or risk leaving subscribers potentially unable to watch things like Sunday NFL football games, the judge said.
Stopping the merger for now is “in the public interest,” Nunley wrote.
Attorneys representing Nexstar and Tegna did not immediately respond to a request for comment.
Nexstar’s attorneys told the court the deal has already been reviewed and cleared by the FCC and the Department of Justice. They said the FCC order commits the company to expand local journalism and programming, not shrink it.
The merger needed the approval of the Republican Trump administration’s FCC because the government had to waive rules that limit how many local stations one company can own. FCC Chairman Brendan Carr said in March that the company had agreed to divest itself of six stations.
The judge said the FCC clearance process for the deal was “unusual,” and that the regulatory oversight “did not curb the manifest anticompetitive effects of this acquisition.”
The Department of Justice, which is tasked with conducting antitrust reviews of these types of mergers, announced it was closing its investigation of the deal in March through “early termination,” the judge noted, ending the review process sooner than is normally required by statute.
“In unusual circumstances — with the FCC’s quasi-adjudicatory licensing proceeding still pending — the President himself weighed in publicly in February and urged federal regulators to approve the deal to ‘knock out the Fake News,’” Nunley wrote.
The preliminary injunction is designed to keep things as they are until the lawsuit is fully decided, Nunley said.
New York Attorney General Letitia James called the ruling a “critical victory” in a statement released Friday evening.
“Consolidating hundreds of local TV stations under one corporate owner would mean higher prices and lower quality programming for consumers,” she wrote. She later continued, “We will keep fighting our case to ensure fair competition among local TV stations that serve communities across the country.”