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We participated in a half-hour conference call with California Attorney General Rob Bonta and attorneys general from several other states on the topic of antitrust litigation, including an ongoing case brought against Nexstar Media Group over its deal to acquire TEGNA. During the call, we asked questions to Bonta and Nevada Attorney General Aaron Ford about their antitrust actions. We have also provided extensive — and, in some instances, exclusive — reporting on the Nexstar-TEGNA merger since it was first announced last year. Read our coverage of Nexstar Media Group here.
California Attorney General Rob Bonta is offering no concessions to broadcasters Nexstar Media Group and TEGNA to avoid a prolonged legal case challenging their merger on federal antitrust grounds.
On a conference call with reporters on Monday, Bonta reaffirmed his state and several others were challenging the deal announced last year based on concerns that a combined Nexstar-TEGNA entity will reduce competition in the television industry, lead to higher prices paid out by cable and satellite customers and encourage mass layoffs in newsrooms where both companies own overlapping stations.
“The federal government ushered this deal through, and it is presumptively unlawful, the merger is,” Bonta said. “What we’re looking for is a block of the merger. That’s what we’ve asked for.”
When asked by The Desk if there were any concessions Nexstar and TEGNA could make to avoid a trial, Bonta didn’t address the issue directly, saying instead that he felt the broadcasters were unlikely to prevail on the matter.
“It’s already permissively unlawful, and that’s why it’s been blocked through a preliminary injunction,” Bonta said, referring to the legal order that requires Nexstar and TEGNA to maintain separate operations while the case proceeds. “Nexstar and TEGNA are both appealing the order; I do not think they will prevail based on the facts and the law, but it is their right to try.”
California and seven other states filed their antitrust challenge in March, just one day before the Federal Communications Commission (FCC) and the U.S. Department of Justice (DOJ) cleared the transaction. Nexstar said it closed on its acquisition of TEGNA within minutes of securing those approvals.
Under a court order handed down last month, Nexstar is required to maintain distance between its own business and that of TEGNA, with few exceptions. On a conference call last week, Nexstar executives said TEGNA was operating as a subsidiary business with separate executive leadership that is accountable to Nexstar’s Board of Directors.
Nexstar contends the merger is necessary to compete against streaming services backed by major technology companies like Netflix, Google and Amazon, which have developed their own premium entertainment products, poached live telecast rights to must-watch sports and siphoned off advertising dollars that broadcasters depend on.
Federal rules prevent companies from having direct ownership of licensed TV stations that reach more than 39 percent of the American viewing audience — something Nexstar’s acquisition of TEGNA exceeds. No such rule exists for streaming services. The FCC said it granted waivers to the rule in each market where TEGNA owns a TV station based on the presumption that the deal serves the “public interest.”
Nevada Attorney General Aaron Ford, whose state is not participating in the lawsuit against Nexstar but has joined California and other states in seeking antitrust relief in cases brought against others, said states have a responsibility to ensure “business can compete on a level playing field — whether we’re taking on big tech, challenging unfair pricing practices or holding monopolies accountable.”
When asked by The Desk if the case against Nexstar might disadvantage broadcasters over tech-backed streaming services, Ford reiterated that antitrust action brought by a coalition of states was necessary to keep major companies in check.
“I don’t know if I will respond specifically to whether I’m doing them a favor or not; what we will say is that we continue to be we can continue to consider whether these types of mergers are going to decrease competition and provide consumers less opportunity if it endures to the benefit of others, then that’s a tangential benefit,” Ford said. “Our primary focus as attorneys general is to look at the antitrust laws and to look at the particular instances of requested mergers and whatnot, and ascertain whether, again, it is going to undermine competition and reduce choices for consumers.”
Those cases are also expensive to prosecute: Bonta noted that it typically takes “20 attorneys to bring an antitrust case, and it costs $20 million,” with the money going toward the hiring of “experts, economists and others to opine about the market and the impacts of the proposed merger or other action in the market.”
“These are very expensive cases, and we need more money,” Bonta asserted. “In California, we are already blessed with a relatively robust team all things considered — but, given the retreat by the United States federal government from this space, it means we need to do more.”
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- Five states added to antitrust lawsuit against Nexstar over TEGNA deal
- Appeals court sets deadlines for briefs in Nexstar-TEGNA deal lawsuit
- Federal judge issues preliminary injunction blocking Nexstar-TEGNA deal
- FCC commissioners could retroactively deny Nexstar-TEGNA deal
- Nexstar grabs $1.34 billion in revenue during Q1, CEO touts TEGNA deal
