Key Points
- A group of state attorneys general has urged a federal appeals court to uphold a temporary injunction preventing Nexstar Media Group from integrating operations with TEGNA while antitrust litigation proceeds.
- The injunction allows Nexstar to operate TEGNA as a standalone subsidiary, limiting operational overlap to certain financial disclosures required for regulatory compliance.
- The states argue the injunction is necessary to preserve a meaningful remedy if they ultimately succeed in blocking the merger, warning that full integration could be difficult to reverse.
A group of state attorneys general have formally asked a federal appeals court to uphold a temporary injunction issued against Nexstar Media Group and TEGNA that was issued by a lower court judge in April.
In a redacted filing made public this week, the plaintiffs — which include the original eight states that filed a federal antitrust lawsuit to block Nexstar’s acquisition of TEGNA, but not five others who joined the case later — said attorneys representing the local television broadcasters did not go far enough in providing evidence or reasonable testimony to demonstrate why the appeals court should overturn the injunction.
The lower court’s order prohibits Nexstar from commingling its business operations with that of TEGNA, though the two companies are allowed to share a limited amount of financial information necessary to comply with certain regulatory requirements.
Nexstar closed on its acquisition of TEGNA in March, within hours of receiving approvals from the U.S. Department of Justice and the Federal Communications Commission (FCC) and nearly a full day after the state AGs and DIRECTV filed separate but related lawsuits seeking to block the deal.
Nexstar is operating TEGNA as a subsidiary business while the case plays out. TEGNA has its own Board of Directors and suite of C-level executives that are separate from those of Nexstar.
During an April hearing and in subsequent legal filings, attorneys for Nexstar said there was no evidence to support the claim that the combination will lead to higher prices for anyone. Lawyers also pointed to hundreds of local and regional journalism awards won by Nexstar and TEGNA journalists as proof of the companies’ commitments to local news, though they stopped short of challenging the claim that the merger will lead to smaller news operations through layoffs.
In their appellate brief, the state AGs contend that preserving TEGNA as a standalone company is necessary to maintain an effective remedy should the ultimately prevail in the broader lawsuit. If a court does not maintain an injunction, Nexstar will be allowed to move forward on combining TEGNA’s operation with its own in a way that could be irreversible, even if the states and DIRECTV win their case down the road.
At the center of the lawsuit are allegations that the merger would increase Nexstar’s leverage during retransmission consent negotiations with cable, satellite and fiber television providers. The states claim that by controlling additional “Big Four” network affiliates in overlapping markets — those that carry programming from ABC, CBS, Fox and NBC — Nexstar would be able to demand higher retransmission fees that would ultimately be passed on to consumers through higher television bills.
The filing also argues the merger threatens local news competition. The states allege Nexstar’s acquisition strategy has historically involved newsroom consolidation and operational efficiencies that can reduce the quantity and quality of local news programming in affected markets. They contend the merger would likely lead to similar outcomes in overlapping markets where both companies currently operate stations.
Nexstar has an opportunity to file a response brief within the next few weeks. The company’s Chief Legal Officer, Rachel Morgan, left the company in May. Earlier this week, it was announced Morgan joined the C-suite at Dave & Buster’s Entertainment.
