WASHINGTON—Although the Federal Communications Commission has approved the Nexstar deal to acquire Tegna and Nexstar quickly declared the $6.2 billion transaction closed on March 19, legal challenges to the deal continue to mount, with Newsmax Media and several pay TV groups filing a motion in United States Court Of Appeals for the District Of Columbia Circuit seeking to halt the deal.
The emergency motion for stay and injunction pending appeal was filed on March 21 by the Broadband Communications Association Of Pennsylvania, Broadband Communications Association Of Washington, Indiana Cable And Broadband Association, Mississippi Internet And Television, Tennessee Cable & Broadband Association, VCTA – Broadband Association Of Virginia and Newsmax Media Inc.,
As previously reported, eight states have separately filed an emergency motion in California seeking an injunction blocking the deal while the federal court considers their antitrust lawsuit filed last week.
Article continues belowLike the California filing, the motion in D.C. Circuit complains that the FCC acted improperly in approving the deal and that Nexstar moved too quickly to close the deal.
“The merger `adversely affect[s]’ Appellants and consumers: By lifting regulatory restrictions on the first and third biggest broadcasters, the new company will upend the market for cable news and digital media and exert its newfound leverage to demand higher and higher fees from cable providers and other multichannel video programming distributors (MVPDs) wishing to carry Nexstar/Tegna stations (which in turn means higher monthly TV bills for American consumers). Yet while Congress guaranteed adversely affected entities the right to judicial review, it will be exceedingly difficult as a practical matter to unwind the acquisition once Tegna fully dissolves into Nexstar. That fact is not lost on Nexstar and TEGNA—rather than slowing things down to facilitate review, they apparently worked hand-in-glove with the FCC to frustrate judicial review: The order approving the transaction was publicly released around 6:50 PM; by 7:05 PM, Nexstar publicly announced that the transaction had already closed.”
More specifically, the filing argues that its challenge to the FCC’s order is likely to succeed because the FCC’s “order is flawed from stem to stern. In the Consolidated Appropriations Act of 2004, Congress prescribed a `39 percent national audience reach limitation, so a company with 80% national reach [that the combined Nexstar/Tegna group would have] should be a nonstarter. FCC regulations also prohibit one company from owning more than two stations in a single market—so a company owning 3 stations in scores of markets should also be a nonstarter. And even if the Commission somehow retained authority to suspend either requirement wholesale, the Commission has never done so—so allowing the subordinate Bureau to do so should be yet another nonstarter, because the Bureau expressly lacks authority over `novel questions of law, fact or policy.’”
“Under binding precedent from both this Court and the FCC, the least the Commission had to do was hold a hearing and put this transaction to a vote of the Commissioners,” the motion continued. “But that precedent went out the window after a social-media directive from President Trump to “GET THIS DEAL DONE!” The Media Bureau then dashed out an order approving the transaction in three-and-a-half months—roughly half the usual timeline—whistling past the Commission’s prior position that it lacked the authority to `decline to enforce” the 39% cap “against any person or entity.’”
“The remaining factors confirm the need for a stay,” the motion concluded “Notwithstanding the `serious, substantial’ legal questions that the Bureau purported to resolve, Nexstar and Tegna spirited their transaction across the finish-line in an attempt to avoid defending the Bureau’s `difficult and doubtful’ conclusions in court. Notwithstanding this gambit, substantial steps remain before full integration, and this Court should act promptly to enjoin them. Failing to do so would eviscerate Appellants’ right to review while hearkening the problems that Congress’ `39 percent national audience' reach limitation’ sought to prevent, concentrating control over high-value news, sports, and emergency programming in a single company and empowering that company to inflate prices while dictating what gets reported to 80% of households. And it would give future Commissioners (and Presidents) a roadmap to follow: Shunt politically-favored-but-legally-dubious mergers to the Bureau and give the parties a head-start to close before adversely affected entities can get into court. To protect its jurisdiction, to preserve Appellants’ statutory right to review, and to safeguard consumers, the Court should immediately stay the Bureau’s order and direct Nexstar and Tegna to hold separate and take no further steps to combine.”
