Fed Judge Says No Sir to Nexstar/Tegna Merger

A federal judge has blocked the long-planned merger of Nexstar Media Group and Tegna, the company that owns Atlanta’s NBC affiliate, WXIA TV, 11 Alive, and its sister, WATL TV 36.

U.S. District Court Chief Judge Troy L. Nunley replaced a temporary restraining order issued two weeks ago with a preliminary injunction late Friday afternoon, siding with eight state attorneys general and streaming company DirecTV in their belief that their legal filing to end the merger would be successful.

Judge Nunley’s ruling upgrades an emergency order that blocked the deal for three weeks, shortly after the FCC approved the merger. The federal agency agreed with Nexstar’s contention that it benefited the public interest by expanding local news and creating a stronger competitor to “big tech.” The ruling will remain in effect until an antitrust lawsuit is settled.

The plaintiffs contended that this merger would stifle local journalism, jack up prices for consumers, and violate a law passed by Congress that caps station reach to 39% of American households.

The order takes effect on Tuesday. Nexstar will need to continue to let Tegna operate as a “separate and distinct, independently managed business from Nexstar,” said the decision. Nexstar must also make sure Tegna remains an “ongoing, economically viable, and active competitor.”

The $6.2 million merger would have made WXIA/WATL part of a 265-station group in 44 states, covering 80% of American viewers. Most of the stations are NBC, ABC, CBS, and Fox stations. Currently, Nexstar doesn’t own any stations in the Atlanta market.

Nexstar also owns the NewsNation cable news network.

Judge Nunley stated in his emergency temporary restraining order that Nexstar would own as many as three “big four” stations in 31 local television markets, giving the company the ability to charge higher broadcast fees to DirecTV and other multichannel video programming distributors (MVPD’s), and if they did not comply, viewers would lose access to network programs in those markets.

The FCC and the Department of Justice both cleared the merger on the grounds that the station would divest six stations.

The judge also balked at Nexstar’s request for a $150 million bond to cover damages from the injunction, saying the company had not proved it would be hurt by a hold in their merger plans.

Nexstar said it would appeal the ruling.

A copy of the ruling (credit: Deadline.com) is available here.