A federal magistrate judge in California has rejected an attempt by DIRECTV and a coalition of state Attorneys General to compel Nexstar Media Group and TEGNA to provide detailed information about the efficiencies they expect to achieve through their proposed merger.
In an order issued last Thursday, U.S. Magistrate Judge Carolyn Delaney ruled that the disputed request sought information that would be more appropriately addressed through expert testimony later in the antitrust proceedings.
The decision allows Nexstar and TEGNA to avoid revealing how the companies determined its $6.2 billion merger would create operational efficiencies, though the court left open the possibility that DIRECTV and the state attorneys general could solicit that information later down the road, including at trial.
The dispute concerns an interrogatory filed last month by the plaintiffs in the case, demanding the broadcasters to identify every efficiency they contend would result from the merger that could not be achieved independently.
DIRECTV and the states also wanted Nexstar to explain how it planned to achieve each efficiency and provide the factual basis for claiming those benefits would be unavailable without the transaction.
Nexstar and TEGNA objected to the request, describing it as overly broad, irrelevant and unduly burdensome.
Delaney agreed that the question, as written, “prematurely seeks information that will properly be the subject of expert testimony.”
The judge denied the plaintiffs’ motion to compel but said they could revisit the matter if the defendants do not address their efficiency claims during expert discovery. Delaney also noted that the Ninth Circuit has expressed skepticism about an efficiencies-based affirmative defense in antitrust cases.
DIRECTV and more than a half-dozen state attorneys general filed their antitrust lawsuit in March, several months after Nexstar agreed to acquire TEGNA and its portfolio of 60 television stations.
Less than one full day after the case was filed, federal regulators approved the transaction, granting Nexstar a waiver to ownership limitations that normally prevent a single broadcast company from amassing direct control of licensed TV stations that reach more than 40 percent of the American viewing audience.
The Federal Communications Commission (FCC) said Nexstar had shown good cause that acquiring TEGNA’s TV stations would serve the public interest, allowing the company to compete against deep-pocketed tech companies and their streaming services while making ongoing financial investments in local news and community-oriented programming. The waivers came just a few weeks after Nexstar laid off newsroom employees at three of its largest TV stations.
DIRECTV and the state attorneys general contend that allowing Nexstar to acquire TEGNA will concentrate too much power with a single broadcaster, which will lead to local newsroom consolidation that results in fewer perspectives on TV and cause cable and satellite rates to increase by giving Nexstar significant leverage over the distribution of highly-sought ABC, CBS, NBC and Fox-affiliated stations.
In April, a federal judge overseeing the case issued an injunction that allows Nexstar to own TEGNA on paper but requires the two companies to operate separately while the lawsuit proceeds. TEGNA is now operated by an independent board of directors and has its own line-up of C-suite executives that are separate from Nexstar.
Both sides in the antitrust case have asked a federal judge to approve a trial date in July 2027.
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