SACRAMENTO—A temporary restraining order (TRO) halting the merger between Nexstar and Tegna has been issued by U.S. District Judge Troy L. Nunley in California in the U.S. District Court Eastern District Of California.
The ruling blocks the two companies from proceeding with integration of their operations until the court issues another ruling on a preliminary injunction in an antitrust case filed by DirecTV that seeks to block the deal.
The court has asked for further pleadings on the issue and plans to hold an in-person hearing on April 7.
Article continues belowThe FCC approved the deal and Nexstar announced it had closed the $6.2 billion transaction but the merger continues to be challenged in the court.
The March 27 ruling was in response to an antitrust suit brought by DirecTV in the Eastern District of California, the same court where where eight states have filed a separate antitrust lawsuit seeking to block the deal. Opponents of the deal have also filed lawsuits in Federal Court in U.S. Court of Appeals for the District Of Columbia Circuit.
In the ruling, Nunley noted that the deal will allow Nexstar to increase retransmission fees, which will give it more leverage to “threaten and impose blackouts…That threat leaves distributors with two bad options: acquiesce to Nexstar’s higher fees or lose access to these stations, thereby blocking the MVPD’s subscribers from accessing the content carried on the blacked-out stations and driving some consumers to switch to other distributors’ services where they can find that same content.”
“In short, by making blackouts even more painful for distributors like DirecTV, the merger will make it even harder for them to resist Nexstar’s demands for higher prices,” the judge wrote.
Nunley also rejected Nexstar’s arguments that a TRO would harm them. “First, Defendants do not adequately explain why a hold-separate order would prevent Nexstar or Tegna from expanding and increasing its investment in local news or prevent it from investing in local programming and local coverage. Second, congressional intent will not be undermined simply because the FCC has cleared this transaction. As Plaintiff correctly notes, the FCC was `not given the power to decided antitrust issues’ and FCC action `was not intended to prevent enforcement of the antitrust laws in federal courts.’ A court order to enforce antitrust laws, therefore, would not undermine congressional intent in regulation of the broadcast industry.”
“Based on the foregoing, the Court finds Plaintiff [DirecTV] sufficiently establishes irreparable harm in the absence of a TRO,” the court noted.
