A federal appeals court in California has scheduled a hearing to evaluate arguments by a coalition of state attorneys general, DIRECTV and Nexstar Media Group over a lower court’s injunction that requires Nexstar and its subsidiary TEGNA to operate separately while an antitrust case over its merger proceeds.
According to court records reviewed by The Desk, all sides are scheduled to present oral arguments in the matter on November 17 at the U.S. Court of Appeals in Pasadena, nearly 400 miles from where the broader case was filed in Sacramento earlier this year.
The appeal concerns an injunction issued by a federal judge in April that permits Nexstar to own the broadcast licenses of 60 TEGNA TV stations on paper while requiring the two companies to maintain separate operations until an antitrust case brought by DIRECTV and a dozen state attorneys general plays out.
Nexstar and TEGNA are hoping to nullify the injunction on appeal, while DIRECTV and the state attorneys general are looking to uphold it.
California Attorney General Rob Bonta is leading the group of states fighting the acquisition. Their lawsuit was filed less than 24 hours before federal regulators approved the transaction. Nexstar rushed to close the deal within hours of receiving sign-offs from the Federal Communications Commission (FCC), an unusual move that state regulators say was meant to obviate their legal challenge.
DIRECTV says the merger is problematic because it violates federal law regarding broadcast license ownership — ordinarily, one person or company may not hold broadcast TV licenses that reach more than 39 percent of the American viewing audience.
Nexstar has long used creative accounting and tactics to extend its reach beyond what federal ownership rules allow, but the $6.2 billion transaction to acquire TEGNA was an audacious testing of the waters under a new administration that has expressed views favorable to mass media consolidation.
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In April, U.S. District Judge Troy Nunley issued an injunction that requires Nexstar to distance itself from TEGNA — an injunction that was upheld after DIRECTV complained about Nexstar appointing its own executives to TEGNA’s board of directors, which has since been reset with independent executives.
Nexstar said it would appeal the injunction, and the hearing scheduled for November 17 is part of that process.
It isn’t clear if attorneys from all sides will actually make it to Pasadena: Court records reviewed by The Desk left open the possibility that the court will review written briefs submitted by Nexstar, DIRECTV and the states instead of hearing in-person oral arguments.
The matter could also be settled before a preliminary trial date next July: During a conference call with investors in August, Nexstar CEO Perry Sook said he was open to resolving the matter out of court.
“If we can settle the litigation prior to going to trial next year, that has a benefit for us,” Sook said. “But we’re not necessarily under the same pressures that other people are in terms of drop-dead dates or ticking fees or whatever, because we’ve already closed on the acquisition.”
