Executives at Nexstar Media Group have selected a new Board of Directors to oversee its subsidiary business TEGNA after a federal judge ruled that its earlier board comprised of Nexstar’s C-suite violated a prior court order.
In a status update filed in court on Tuesday, attorneys for Nexstar say the new Board of Directors consists of TEGNA’s CEO Patrick Paolini and two other directors — investment banker Bruce Levy and former Media General board member Eugene Davis.
Nexstar acquired Media General’s local television stations in 2017, but attorneys for the broadcaster said the acquisition was five years after Davis resigned his board seat with the company. He now works as the proprietor of his own consulting firm, while Levy works for Truist Securities after a lengthy career at Wells Fargo.
Paolini was appointed to serve as TEGNA’s CEO in May, a move Nexstar made to fulfill the requirements of a preliminary injunction issued by a federal judge one month prior in an ongoing lawsuit challenging the company’s acquisition of TEGNA on antitrust grounds.
The injunction required Nexstar to distance itself from TEGNA while the case plays out in court, though it is allowed limited cooperation with the company in order to fulfill financial reporting requirements.
Despite the hold separate order, Nexstar initially appointed its own CEO and other C-level executives to TEGNA’s Board of Directors, raising questions from the plaintiffs in the case, DIRECTV and a number of state attorneys general, about whether the board was created in the spirit of the judge’s order.
Earlier this month, the judge overseeing the case delivered his answer: It did not. Nexstar was ordered to dissolve TEGNA’s board, start over and deliver timely status updates to the court about how the company and its executives were complying with the court’s injunction.
In addition to the three named board members, Nexstar said it has appointed Marc Sher to serve as the Secretary of the Board. Sher currently serves as TEGNA’s Senior Vice President and General Counsel, and has no voting rights while on TEGNA’s board, the company said.
The last remaining Nexstar executive seated on TEGNA’s board, Lee Ann Gliha, resigned on Monday after the new board was installed, attorneys for Nexstar said on Tuesday.
Nexstar is appealing the federal court’s injunction, and its executives say it intends to vigorously defend its merger, which received hurried sign-offs from the U.S. Department of Justice and the Federal Communications Commission (FCC) less than 24 hours after DIRECTV and the state attorneys general filed their lawsuit.
The states and DIRECTV contend that the merger violates federal antitrust law because it concentrates too much power with a single broadcaster — Nexstar is already the largest independent owner and operator of major network-affiliated TV stations, and its portfolio will grow even bigger if it is allowed to acquire TEGNA’s collection of more than 60 stations in 40 markets.
DIRECTV is concerned that the merger will lead to higher prices paid by cable and satellite customers, because it must pay Nexstar for the privilege of redistributing its channels to subscribers. Numerous states participating in the lawsuit share that concern; they are also worried that Nexstar will consolidate and close local newsrooms in an effort to save money, which could deprive local communities of diverse viewpoints.
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