“Defendants also do not dispute Plaintiff’s contention that they appointed a news director to oversee a single newsroom and use the same on-air talent in 16 (market areas) where Nexstar or Tegna have a Big Four duopoly or triopoly (in a market area).
Before the merger, Nexstar owned 201 full-power television stations and Tegna owned 64, for a total of 265. They agreed to cancel six stations, bringing the total number down to 259.
DirecTV claims that “absent a separate order, Nexstar will fully absorb Tegna, eliminating the companies’ head-to-head competition in 31 overlapping markets,” Nunley said. “Plaintiff alleges that it will be irreparably harmed by significantly diminished bargaining power against Nexstar in retransmission consent negotiations. Plaintiff alleges that it will soon negotiate access to highly sought-after content, including Big Four sports and local news broadcasts. The threat.”
Judge: Nexstar can’t swallow Tegna yet
Nunley ruled that DirecTV’s Clayton Act claim would succeed on the merits and that “the public interest outweighs a separate order.” The separate order has multiple components aimed at preventing Nexstar and Tegna from pooling assets or making joint decisions.
“Nexstar must allow Tegna to continue to operate as an independently managed business unit separate and distinct from Nexstar, and Nexstar must take steps to maintain Tegna as a viable, economically viable and active competitor,” Nunley said. “Tegna shall have separate management governing Tegna in accordance with the practices in place prior to the closing.”
A provision in the order requires Tegna’s management to retain control over decision-making “regarding retransmission agreement agreements and negotiations, newsroom staffing, operations and programming, product and service offerings, product development, advertising sales and staffing.”
Another provision says that all local television stations owned by Tegna will be “maintained and operated as independent, sustainable, economically viable and active competitors in the business of licensing retransmission consents” to television providers. The provision, aimed at preventing layoffs, says the firms will “use all reasonable efforts to maintain” Tegna stations’ pre-merger staffing levels.
Nexstar has until April 1 to file an argument why it should not face a preliminary injunction, and a hearing is scheduled for April 7 to discuss a potential preliminary injunction. The judge also ordered Nexstar to file a report by April 6 detailing the steps it has taken to comply with the temporary restraining order.
