A federal judge on Friday evening granted a temporary restraining order to halt Nexstar‘s merger with Tegna, a transaction that creates a broadcasting giant with almost 260 stations across the country.
U.S. District Judge Troy Nunley sided with DirecTV, which is seeking to block the merger on the claim that it violates antitrust laws. A group of states, including California and New York, also are seeking to sideline the transaction.
In his order, Nunley wrote that DirecTV established “a likelihood of success on the merits” on its claim, and that moving forward with the transaction would create “irreparable harm.” Those are two key factors courts weigh in issuing TROs, after which a judge gives a fuller consideration as the legal process plays out. In ordering at least a temporary halt to the merger, the judge wrote that the “private benefits Nexstar could obtain by acquiring Tegna are outweighed by the harm to” DirecTV.
His ruling means that Nexstar and Tegna cannot integrate their operations for 14 days, or if he issues another ruling before that. The judge set a hearing for April 7 on whether to issue a preliminary injunction.
Nexstar and Tegna got the sign off for their merger from the FCC and the Justice Department last week. Shortly after that, Nexstar announced that it had closed the transaction. DirecTV had filed its lawsuit less than a day earlier.
Nexstar has argued that the combination of stations is necessary given the changes in the media landscape, as local advertising has shifted to major tech giants. They contend that the transaction will allow them to make greater investments in local news.
DirecTV has warned that the transaction would give Nexstar-Tegna market power to raise the amount of restransmission consent fees distributors have to pay for carrying its stations. Those fees, DirecTV argued, ultimately would be passed on to the consumer.
The judge wrote, “Nexstar must permit Tegna to continue operating as a separate and distinct, independently managed business unit from Nexstar, and Nexstar must put measures in place to maintain Tegna as an ongoing, economically viable, and active competitor. Tegna shall have separate management that operates Tegna in the ordinary course consistent with pre-closing practices.”
Newsmax, DirecTV and a group of state broadband and cable groups are challenging the FCC’s approval of the merger in a federal appellate court in Washington.
Donald Trump endorsed the $6.2 billion merger last month, and his FCC chairman, Brendan Carr, indicated his support shortly thereafter, even though the transaction was still being reviewed by the agency.
