A federal judge has blocked a $6.2 billion merger of local television giants Nexstar Media Group and rival Tegna until an antitrust lawsuit is resolved.
U.S. District Court Chief Judge Troy L. Nunley in Sacramento, California, made the ruling late Friday afternoon, finding that eight attorneys general and DirecTV were likely to prevail in their legal bid to stop the merger.
The attorneys general, all Democrats, and DirecTV contend the merger will lead to higher prices for consumers, stifle local journalism and that the deal runs afoul of federal laws designed to protect against monopolies.
What the Left Is Saying
The eight Democratic attorneys general and DirecTV argued that the merger would create a company owning 265 television stations in 44 states and the District of Columbia, giving Nexstar unprecedented market power.
New York Attorney General Letitia James called the ruling a "critical victory" in a statement released Friday evening.
"Consolidating hundreds of local TV stations under one corporate owner would mean higher prices and lower quality programming for consumers," she wrote. She continued, "We will keep fighting our case to ensure fair competition among local TV stations that serve communities across the country."
The plaintiffs argued that Nexstar has a track record of consolidating local television news stations when it owns more than one station in a market, meaning viewers "will lose options for where to get their local news."
They also contended the deal could force distributors like DirecTV to comply with Nexstar's demands for higher broadcast fees or risk leaving subscribers potentially unable to watch things like Sunday NFL football games.
What the Right Is Saying
Attorneys representing Nexstar and Tegna did not immediately respond to a request for comment.
Nexstar's attorneys told the court the deal has already been reviewed and cleared by the Federal Communications Commission and the Department of Justice.
They said the FCC order commits the company to expand local journalism and programming, not shrink it.
The merger needed the approval of the Republican Trump administration's FCC because the government had to waive rules that limit how many local local stations one company can own.
FCC Chairman Brendan Carr said in March that the company had agreed to divest itself of six stations.
The Department of Justice announced it was closing its investigation of the deal in March through "early termination," ending the review process sooner than is normally required by statute.
The judge noted that in February, "the President himself weighed in publicly" and urged federal regulators to approve the deal to "knock out the Fake News."
What the Numbers Show
The merger is valued at $6.2 billion.
If completed, the combined company would own 265 television stations in 44 states and the District of Columbia.
Most of those stations are local affiliates of one of the "Big Four" national networks: ABC, CBS, Fox and NBC.
The FCC required Nexstar to divest six stations as a condition of approval.
Judge Nunley wrote that the deal would likely give Nexstar the power to raise the retransmission fees it charges to video programming distributors like DirecTV, which would translate to higher bills for consumers.
The Bottom Line
The preliminary injunction is designed to keep things as they are until the lawsuit is fully decided, Judge Nunley said.
Stopping the merger for now is "in the public interest," Nunley wrote, finding that the plaintiffs are likely to prevail on their antitrust claims.
The judge described the FCC clearance process for the deal as "unusual" and said the regulatory oversight "did not curb the manifest anticompetitive effects of this acquisition."
The case is expected to proceed through the court system, with the antitrust lawsuit continuing while the merger remains blocked.