Judge Orders Pause on Nexstar-Tegna Integration Amid Antitrust Challenge

According to Bloomberg, US District Judge Troy L. Nunley in Sacramento granted DirecTV’s request to pause the companies’ post-merger integration efforts, even though the deal had already been finalized days earlier. In his ruling, issued Friday, Nunley directed the companies to stop further consolidation activities while the legal challenge proceeds.

The decision follows lawsuits filed by DirecTV and a group of state attorneys general led by California, both of which contend that the merger would reduce competition in broadcast television markets across the United States. Per Bloomberg, the states argued that the combined entity would control 265 full-power television stations, reaching approximately 80% of US households, though Nexstar has agreed to divest six stations at the request of the Federal Communications Commission.

Nunley emphasized concerns about the merger’s potential impact on pricing power. According to Bloomberg, the judge noted in his 24-page order that the companies “do not contest this merger will increase Nexstar’s bargaining leverage to extract higher fees.” These fees, known as retransmission rates, are charged by broadcasters to cable and satellite providers and can ultimately be passed on to consumers.

Related: Newsmax, DirecTV Join Challenge to FCC’s Nexstar-Tegna Decision

The judge also pointed to conflicting claims about industry trends. Per Bloomberg, Nunley cited DirecTV’s argument that, despite assertions that streaming competition and cord-cutting would lower fees, Nexstar CEO Perry Nook had recently suggested to investors that retransmission rates could rise instead.

DirecTV has warned that the merger could lead to more frequent and prolonged programming blackouts as negotiations over fees become more contentious. The company argued that allowing integration to continue during the litigation would cause “irreparable harm,” a position Nunley ultimately accepted.

Although the US Department of Justice and the Federal Communications Commission approved the transaction, the legal battle underscores ongoing concerns about consolidation in the media industry. According to Bloomberg, the states and DirecTV sought a restraining order shortly after the deal closed, aiming to prevent Nexstar from fully combining operations with Tegna while the case is being litigated.

Nunley has scheduled a hearing for April 7 to determine whether the pause should remain in place pending a full trial.

Spokespeople for Nexstar, Tegna, DirecTV, and the California Attorney General’s office did not immediately respond to requests for comment.

Source: Bloomberg