Nexstar and Tegna’s Local TV Megamerger Challenged by Eight States

The states contend that combining two of the largest local TV broadcasters in the country would violate antitrust laws by reducing competition. Per The Wall Street Journal, prosecutors argue the merger could result in higher prices for cable and satellite subscribers, job cuts across newsrooms, and diminished diversity in local news coverage. The complaint asserts that the deal would consolidate an outsized share of local broadcasting power under a single company.

California Attorney General Rob Bonta said in a statement that the merger would lead to “incredibly high levels of concentration in local TV markets” and could drive up costs nationwide while harming access to reliable local journalism. According to The Wall Street Journal, the coalition also includes Colorado, Illinois, Oregon, North Carolina, Connecticut, and Virginia.

The legal challenge adds to mounting opposition to the deal. DirecTV filed a separate lawsuit seeking to block the acquisition, arguing that it would give Nexstar excessive leverage in negotiating licensing fees. Per The Wall Street Journal, the satellite provider claims this increased market power would ultimately translate into higher subscription costs for consumers.

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Despite the legal pushback, the Federal Communications Commission has signaled support for the transaction. According to The Wall Street Journal, FCC Chair Brendan Carr has endorsed the merger, although questions remain about whether the agency has the authority to adjust ownership limits that currently cap a broadcaster’s reach at 39 percent of U.S. households. The combined company would far exceed that threshold, potentially reaching around 80 percent of homes if the deal is approved. Nexstar has requested a waiver to move forward.

Related: Democrats Call for Tough Review of Nexstar-Tegna Merger

Nexstar and Tegna have defended the merger as necessary to compete in an increasingly challenging media environment. Per The Wall Street Journal, the companies argue that digital giants such as Google and Amazon are capturing the majority of advertising revenue, putting traditional broadcasters under pressure. Nexstar has warned regulators that even well-established broadcasters are facing a crisis due to this competition.

The deal has also drawn political attention. Nexstar CEO Perry Sook has suggested that a larger company could better compete with dominant national media organizations, while former President Donald Trump has publicly supported the merger, saying it could counterbalance what he described as biased national television networks, according to The Wall Street Journal.

If completed, the merger would further solidify Nexstar’s position as the largest local TV station operator in the United States, with Tegna already ranking among the top broadcasters. According to The Wall Street Journal, in key markets such as California, the combined entity would control a significant share of stations affiliated with major networks including Fox, NBC, ABC, and CBS.

State officials argue that Nexstar and Tegna currently compete in multiple markets and that merging them would eliminate that competition, strengthening Nexstar’s ability to dictate terms to distributors. Per The Wall Street Journal, the lawsuit claims this shift in power could allow the company to impose higher fees or even black out channels during disputes, further impacting consumers.

Source: The Wall Street Journal