Judge blocks Nexstar-Tegna deal, throwing $6.2-billion merger into doubt

A national justice has blocked Nexstar Media Group’s $6.2-billion acquisition of its rival, upending the already consummated national of the nation’s 2 largest tv presumption 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 quality with California Atty. Gen. Rob Bonta and 7 different authorities attorneys general.

The bid takes effect connected Tuesday.

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

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

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

That duplication 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 the towel, but we’ll support warring for consumers, for workers, for affordability and for our section news.”

Bonta and different authorities attorneys wide sued to artifact the merger March 18. The authorities officials, each Democrats, alleged the national would make “a broadcast behemoth” with the “power to rise prices for tv consumers” and diminish “local quality and sports,” their suit stated.

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

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

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

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

Tegna, arsenic corporation, was dissolved and its stockholders were paid retired — raising questions astir what happens adjacent and however Tegna stations volition beryllium governed portion the quality unfolds successful court.

“Nexstar indispensable not power the absorption of the held-separate TEGNA concern unit,” Nunley wrote. “Tegna unit indispensable support power implicit 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 the antithetic quality of blocking a transaction after-the-fact. But the plaintiffs noted that Nexstar had been alert of the authorities attorneys wide concerns since astatine slightest March 10 — much than a week earlier DirecTV and the authorities regulators sued.

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

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

“This determination raises superior concerns astir the Commission’s usage of delegated authorization successful matters involving important legal, policy, and economical consequences,” the 2 lawmakers wrote successful a March 30 missive to the FCC. “The transaction is unprecedented successful scale, resulting successful the largest section broadcast tv radical 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, the longtime proprietor of KTLA, successful 2019 — during the archetypal Trump term.

Opponents person argued that Nexstar’s projected acquisition of Tegna was problematic due to the fact that it gives Nexstar stations successful 44 states covering 80% of the U.S. colonisation — exceeding a 39% ownership headdress acceptable by Congress.

DirecTV has argued that the operation of the nation’s 2 largest tv presumption groups could harm its pay-TV concern by raising prices for consumers and perchance expanding programming blackouts.

The justice precocious past period combined the 2 lawsuits.

During a two-hour proceeding earlier this month, Nexstar attorneys argued against the injunction, saying it had obtained the indispensable national approvals to instrumentality power of the Tegna stations.

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

Nexstar contends the woody would fortify TV presumption economics, allowing stations to bolster their quality gathering and grow the fig 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 the plaintiffs failed to show that the merger posed an contiguous menace to the public.

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

Nexstar is expected to entreaty Nunley’s injunction.

Nexstar had asked the justice to necessitate the plaintiffs to station a $150-million enslaved to compensate it for damages it would endure from immoderate delays successful closing the deal.

But the justice denied that request, penning that Nexstar did not connection a “financial investigation oregon documentary grounds to enactment a enslaved successful this amount” oregon immoderate grounds that it would incur fiscal losses should the injunction beryllium overturned.