Judge Blocks Nexstar-tegna Deal, Throwing $6.2-billion Merger Into Doubt

A national judge has blocked Nexstar Media Group’s $6.2-billion acquisition of its rival, upending nan already consummated national of nan nation’s 2 largest tv position groups.

U.S. District Court Chief Judge Troy L. Nunley connected Friday issued a preliminary injunction that forbids Nexstar, which owns KTLA-TV Channel 5 successful Los Angeles, and its takeover-target, Tegna Inc., from combining operations amid a ineligible conflict pinch California Atty. Gen. Rob Bonta and 7 different authorities attorneys general.

The bid takes effect connected Tuesday.

“Nexstar must licence Tegna to proceed operating arsenic a abstracted and distinct, independently managed business portion from Nexstar,” Nunley wrote. “And Nexstar must put measures successful spot to support Tegna arsenic an ongoing, economically viable, and progressive competitor.”

The injunction is Nexstar’s latest setback successful the arguable deal championed by President Trump.

Bonta and nan others are opposed to nan merger, arguing it violates a 112-year-old U.S. anti-trust rule by knocking retired a awesome competitor . The woody would springiness Irving, Texas-based Nexstar power of 265 tv stations crossed nan country, up from 164. And, successful dozens of markets, including San Diego and Sacramento, Nexstar would ain aggregate TV web affiliates.

That plagiarism has raised concerns astir unit consolidations and wide newsroom layoffs.

“This is simply a captious triumph successful our case,” Bonta said successful a statement. “This merger is illegal, plain and simple. The national authorities whitethorn person thrown successful nan towel, but we’ll support fighting for consumers, for workers, for affordability and for our section news.”

Bonta and different state attorneys wide sued to artifact nan merger March 18. The authorities officials, each Democrats, alleged nan national would create “a broadcast behemoth” pinch nan “power to raise prices for tv consumers” and diminish “local news and sports,” their suit stated.

El Segundo-based DirecTV separately sued. It alleged nan merger would dramatically tilt nan pay-TV playing field, forcing DirecTV to salary dramatically higher fees for nan authorities to transportation Nexstar-Tegna position programming, including section news and NFL football. Those costs, DirecTV said, would beryllium passed on to its 10 cardinal customers.

Trump had been agitating for nan deal, penning successful a February societal media post: “GET THAT DEAL DONE!”

On March 19, nan time aft nan flurry of lawsuits, nan Trump management approved nan deal. The U.S. Justice Department terminated its antitrust reappraisal and nan Federal Communications Commission’s Media Bureau authorized nan transportation of Tegna’s position licenses to Nexstar.

Within an hour, Nexstar announced that it had finalized nan purchase of its McLean, Va.-based rival.

Tegna, arsenic corporation, was dissolved and its stockholders were paid retired — raising questions astir what happens adjacent and really Tegna stations will beryllium governed while nan conflict unfolds successful court.

“Nexstar must not power nan guidance of nan held-separate TEGNA business unit,” Nunley wrote. “Tegna unit must support power complete Tegna’s decisionmaking, including ... negotiations [with pay-TV partners], newsroom personnel, operations and programming, merchandise and work offerings, merchandise development, advertisement sales, and personnel.”

Nexstar has complained astir nan different quality of blocking a transaction after-the-fact. But nan plaintiffs noted that Nexstar had been alert of nan authorities attorneys wide concerns since astatine slightest March 10 — much than a week earlier DirecTV and nan authorities regulators sued.

Colorado, Connecticut, Illinois, New York, North Carolina, Oregon and Virginia person joined California successful nan lawsuit.

The merger was not approved by nan afloat FCC commission, prompting 2 U.S. senators — Ted Cruz (R-Texas) and Maria Cantwell (D-Wash.) — to mobility nan FCC’s handling of nan matter.

“This determination raises superior concerns astir nan Commission’s usage of delegated authority successful matters involving important legal, policy, and economical consequences,” nan 2 lawmakers wrote successful a March 30 missive to nan FCC. “The transaction is unprecedented successful scale, resulting successful nan largest section broadcast tv group successful U.S. history.”

Nexstar has built itself into a colossus done a bid of acquisitions. The astir salient was its $6.2-billion takeover of Tribune Broadcasting, nan longtime proprietor of KTLA, successful 2019 — during nan first Trump term.

Opponents person based on that Nexstar’s projected acquisition of Tegna was problematic because it gives Nexstar stations successful 44 states covering 80% of nan U.S. organization — exceeding a 39% ownership cap group by Congress.

DirecTV has based on that nan operation of nan nation’s 2 largest tv position groups could harm its pay-TV business by raising prices for consumers and perchance expanding programming blackouts.

The judge precocious past period mixed nan 2 lawsuits.

During a two-hour proceeding earlier this month, Nexstar attorneys based on against nan injunction, saying it had obtained nan basal national approvals to return power of nan Tegna stations.

“Setting speech nan different FCC clearance process here, nan Court does not find Defendants’ arguments persuasive,” Nunley wrote.

Nexstar contends nan woody would strengthen TV position economics, allowing stations to bolster their news gathering and grow nan number of newscasts. But DirecTV countered that successful markets wherever Nexstar owns 2 stations, it relies connected conscionable 1 newsroom to programme some channels.

Nexstar lawyer Alexander Okuliar said nan plaintiffs grounded to show that nan merger posed an contiguous threat to nan public.

Nunley, who was elevated to nan national chair by erstwhile President Obama, wrote successful his bid that nan plaintiffs demonstrated they had a way to prevail astatine a proceedings owed to nan merits of their arguments.

Nexstar is expected to entreaty Nunley’s injunction.

Nexstar had asked nan judge to require nan plaintiffs to station a $150-million enslaved to compensate it for damages it would suffer from immoderate delays successful closing nan deal.

But nan judge denied that request, penning that Nexstar did not connection a “financial study aliases documentary grounds to support a enslaved successful this amount” aliases immoderate grounds that it would incur financial losses should nan injunction beryllium overturned.