Nexstar Media Group has asked the U.S. Supreme Court to intervene in a federal antitrust lawsuit brought three years ago by DIRECTV over fees charged for distributions of local television stations that are owned by other companies.
In its petitioned filed with the Supreme Court last week, Nexstar says DIRECTV cannot prove that it suffered “downstream” financial losses when Nexstar demanded the company negotiate distribution fees concerning around three dozen local TV stations owned by Mission Broadcasting and White Knight Broadcasting.
Nexstar operates nearly all Mission and White Knight stations through local marketing agreements, which allows the company to control and financially benefit from those stations without directly owning them. The use of local marketing agreements is common in the broadcast TV industry — those arrangements allow large companies to circumvent federal rules that are intended to limit direct ownership of local TV stations.
DIRECTV brought its price-fixing lawsuit against Nexstar in 2023, arguing the company’s negotiations of White Knight and Mission stations violated federal ownership rules and antitrust law. Nexstar was more than a passive operator of TV stations, DIRECTV said — it had a significant financial control over those outlets by requiring the satellite TV provider to make arrangements for the carriage of Mission and White Knight stations in addition to those owned directly by Nexstar.
The issue was one of several elements that was at the center of a programming-related dispute that saw Nexstar’s stations pulled from DIRECTV’s platform the same year, shortly after the lawsuit began. The dispute was resolved with Nexstar’s stations restored to the platform a few months later, but Mission and White Knight stations remain unavailable to DIRECTV’s satellite and streaming subscribers.
In 2024, a lower court dismissed DIRECTV’s lawsuit against Nexstar, finding that the company couldn’t prove financial harm because it didn’t agree to the fee demands, which meant it wasn’t paying for White Knight- or Mission-owned channels. But the Second Circuit Court of Appeals reversed the decision last year, saying DIRECTV could demonstrate losses by showing customer cancellations were tied to the lack of carriage of those stations, based on Nexstar’s onerous fee demands. Earlier this year, the appellate court rejected a request from Nexstar for a reconsideration of its decision to restore the lawsuit, which is still pending in court.
Nexstar’s petition to the Supreme Court doesn’t guarantee that its case will be heard, but the Supreme Court typically does intervene when cases may face different outcomes in different jurisdictions. In this case, the Second Circuit’s decision in the lawsuit is at odds with legal precedents established in the Ninth Circuit and Tenth Circuit on similar price-fixing issues. In the latter circuits, appellate judges have held that companies like DIRECTV cannot bring a case based on hypothetical lost revenue.
The lawsuit is separate from one brought by DIRECTV earlier this year, which challenges Nexstar’s $6.2 billion acquisition of peer broadcaster TEGNA. DIRECTV says that deal violates antitrust law because it gives Nexstar too much direct ownership of local TV stations, including at least two “Big Four” network-affiliated stations in three dozen markets, which will reduce competition and lead to rising cable and satellite bills for consumers.
In April, a federal judge overseeing that case issued a preliminary injunction that effectively requires Nexstar to separate its core business from TEGNA while allowing the latter company to operate as a wholly-owned subsidiary business. Nexstar is appealing the order.
