Judge halts Nexstar/Tegna merger after FCC let firms exceed TV ownership limit

Although the Trump administration approved Nexstar Media Group’s $6.2 billion purchase of Tegna, a US judge has ordered the two companies to stop integrating their assets and operations. US District Judge Troy Nunley, an Obama appointee, issued a temporary restraining order on Friday prohibiting integration of the companies until further rulings by the court.

“Defendants must immediately cease all ongoing actions relating to integration and consolidation of Nexstar and Tegna,” wrote Nunley, the chief judge in US District Court for the Eastern District of California.

Nunley said he agrees with plaintiff DirecTV that immediate integration of the merging firms could eliminate competition, result in newsroom layoffs and shutdowns, and make it more difficult to divest Tegna stations if the court ends up requiring a divestiture after reviewing the merger. DirecTV has established that “the Nexstar-TEGNA merger will substantially lessen competition in markets in which it participates,” and that there would be irreparable harm if a restraining order isn’t issued, Nunley wrote.

While DirecTV filed the lawsuit in which the temporary restraining order was issued, the satellite TV provider isn’t the only party trying to unwind the merger. A coalition of advocacy groups sued the Federal Communications Commission in an attempt to reverse the merger approval, and the deal is being challenged by state attorneys general from California, Colorado, Connecticut, Illinois, New York, North Carolina, Oregon, and Virginia.

Although the temporary restraining order is good for only 14 days, it can be converted to a preliminary injunction that would remain in place during a trial to determine whether the merger violates anti-competition law. Temporary restraining orders and preliminary injunctions are governed by the same legal standards, and the judge ordered Nexstar to show cause for “why a preliminary injunction should not issue enjoining Defendants from further integration, consolidation, or joint management of Nexstar and the held-separate Tegna business unit.”

Trump FCC let firms exceed 39% TV ownership cap

DirecTV argues that the deal gives Nexstar additional bargaining leverage to demand higher retransmission consent fees from cable and satellite TV firms. Retransmission disputes frequently result in blackouts of broadcast stations on TV services.