Five additional states have joined a federal lawsuit originally filed last month that seeks to block Nexstar Media Group’s $6.2 billion acquisition of peer broadcaster TEGNA on antitrust grounds.
The new states — Kansas, Indiana, Massachusetts, Pennsylvania and Vermont — joined the State of California and six others, plus the Commonwealth of Virginia, in seeking a permanent order that prevents Nexstar from moving forward with its acquisition of 60 local television stations owned by TEGNA.
The eight original parties to the lawsuit all have sitting governors that are associated with the Democratic Party, but two of the five additional states — Indiana and Vermont — have Republican governors, evolving the lawsuit into a bipartisan effort.
“Antitrust enforcement is not political — it’s about protecting working families and helping ensure the benefits of a vibrant economy are for everyone, not just well-connected corporations,” California Attorney General Rob Bonta, whose state is leading the legal challenge, said in a statement emailed to The Desk on Thursday. “This is not controversial stuff — this merger is illegal and will give Nexstar and Tegna the ability to control and raise prices, fire journalists, and dominate the media landscape. State attorneys general nationwide understand just how important robust antitrust enforcement is to American life, and what a rotten deal this is for consumers, for workers, for affordability, and for our local news. We welcome our sister states into the fray and look forward to fighting alongside them.”
An amended complaint adding the five states as plaintiffs in the case was filed in federal court on Thursday. The case is being brought in the Eastern District of California, where Nexstar and TEGNA own one TV station each.
The states say the deal violates antitrust laws because it concentrates too much power with a single broadcaster. By allowing Nexstar to acquire TEGNA, the states say the company will be incentivized to consolidate news operations, which will result in journalists being laid off.
The plaintiffs also worry Nexstar will have more leverage to raise distribution fees charged to cable and satellite companies who carry their “Big Four” affiliates — stations that offer programming from ABC, CBS, Fox and NBC. Those fees have steadily increased over the past decade as broadcasters sought to offset declines in their advertising businesses. Distribution fees are passed on to cable and satellite subscribers in their bills, which have also increased over time. A similar lawsuit filed by DIRECTV makes the same complaints; that case was consolidated into the one brought by the state attorneys general last month.
Nexstar says its acquisition of TEGNA is necessary to better compete against streaming services backed by deep-pocketed technology companies, which have grabbed television broadcast rights to lucrative sports events and siphoned off advertising dollars accordingly. The broadcaster said its acquisition received all necessary approvals, including sign-offs from the Federal Communications Commission (FCC) and the U.S. Department of Justice (DOJ), before it acquired TEGNA, which is being operated as a subsidiary business while the case proceeds.
Earlier this month, U.S. District Judge Troy Nunley issued a preliminary injunction that requires Nexstar to maintain its distance from TEGNA while the case proceeds after determining the merger likely violates antitrust laws as alleged by the states and DIRECTV. Nexstar is appealing the injunction.
