Appeals court sets deadlines for briefs in Nexstar-TEGNA deal lawsuit

Nexstar CEO Perry Sook exits the U.S. Courthouse in Sacramento, California. (Photo by Matthew Keys for The Desk)

A federal appeals court has scheduled deadlines for Nexstar Media Group and opponents of its $6.2 billion merger to submit their opening briefs in a challenge to an injunction issued by a lower court that temporarily blocks the deal from moving forward.

The Ninth Circuit Court of Appeals has ordered Nexstar to submit its brief in support of overturning the lower court’s injunction by May 20, with DIRECTV and several state attorneys general submitting their reply brief in support of the injunction by June 17.

While the court has ordered the briefs due by those dates, it is not uncommon for the court to modify its deadlines if one or both sides request a short postponement.

The appeal comes after U.S. District Court Troy Nunley issued a preliminary injunction that prevents Nexstar from fully integrating TEGNA’s business into its own while a lawsuit challenging the deal on antitrust grounds proceeds.

The injunction allows Nexstar to meet its financial obligations with respect to the deal, and to continue reporting the financial earnings of its own company and TEGNA as required by law, but prevents Nexstar from consolidating the operations of TEGNA-owned stations within its own and prohibits the company from laying off workers until the lawsuit is resolved.

The judge said he was persuaded by early evidence that the merger likely violated federal antitrust laws, in that it would concentrate too much power with a single broadcaster in more than three dozen communities where Nexstar and TEGNA own local TV stations.

Opponents of the merger say the deal gives Nexstar the ability to raise the fees it charges to cable and satellite operators, which will require customers to pay more under threat of losing access to premium entertainment, sports and local news offered by its broadcast stations affiilated with one or more of the “Big Four” networks — ABC, CBS, Fox and NBC.

State AGs from California and elsewhere say the deal will also lead to fewer investments in local news, to include laying off journalists in cities where Nexstar and TEGNA own local news-producing stations, which will lead to less competition and fewer diverse sources of news.

Nexstar, which is already the largest independent owner-operator of broadcast TV stations in the country, contends that the deal is crucial to its ability to survive in a landscape littered with premium streaming services, which are poaching live sports rights that its local stations depend on for advertising revenue and income linked to cable TV distribution. All four major networks offer their live sports, including NFL football games, on their own premium streaming services that don’t require access to cable.

Without consolidation, Nexstar executives warn their ability to make substantial investments in local news will dwindle over time. Even before the merger, Nexstar moved forward with layoffs at its three biggest TV stations in New York City, Los Angeles and Chicago