Nexstar Warns It Cannot Fully Comply With Court Order Halting Tegna Merger

The dispute stems from a temporary restraining order issued by a U.S. judge that requires Nexstar to keep Tegna’s business separate while the court reviews whether the merger violates competition laws. However, Nexstar and Tegna argue that the order came too late in the process, after key parts of the transaction had already been executed. According to Variety, the companies say certain integration steps taken at closing cannot simply be reversed.

The companies warned the court that attempting to unwind those actions could create significant operational and legal problems. Per Variety, they described the situation as one that could trigger regulatory conflicts and disrupt corporate governance, while also harming day-to-day business functions.

The legal clash follows a rapid sequence of events. Nexstar closed the acquisition on March 19 after receiving approval from federal regulators, creating what would be the largest local television station group in the United States, reaching roughly 80% of households. But almost immediately, lawsuits from DirecTV and a coalition of eight states sought to block the deal, arguing it would reduce competition and raise costs for consumers.

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Related: Judge Orders Pause on Nexstar-Tegna Integration Amid Antitrust Challenge

A federal judge sided, at least temporarily, with those concerns. The court ordered Nexstar to halt integration and maintain Tegna as a separate entity, citing the likelihood that the merger could violate antitrust laws due to its scale and market concentration.

Nexstar now says that complying with that directive is far from straightforward. The company pointed to internal systems and financial reporting requirements that already combine Tegna’s data with its own, obligations that cannot easily be undone without violating regulatory rules. According to Variety, Nexstar also flagged issues with employee compensation systems and contractual agreements that were automatically triggered when the deal closed.

One of the more complicated issues involves retransmission agreements with pay-TV providers. Once the merger was finalized, Tegna’s contracts with certain distributors were replaced by Nexstar’s existing agreements. Per Variety, this creates a contradiction with the court’s order requiring Tegna to operate independently, since those agreements are now controlled under Nexstar’s framework.

The case is unfolding amid broader scrutiny of the merger. Lawmakers have begun questioning how regulators approved the deal, while state officials and industry players continue to argue that the combined company could wield excessive power in local television markets.

For now, the court has scheduled further proceedings to determine whether a longer-term injunction should be imposed. In the meantime, Nexstar’s position highlights a central tension in the case: how to preserve competition in a deal that has already been completed and partially integrated.

Source: Variety