“Nunley wrote that the defendants likewise do not dispute the plaintiff’s claim that in the 16 [market areas] where Nexstar or Tegna holds a Big Four duopoly or triopoly, they appoint a single news director to run one newsroom and employ the same on-air talent across all Big Four channels they own in the [market area],” Nunley wrote.
Before the merger, Nexstar controlled 201 full-power TV stations and Tegna controlled 64, for a combined total of 265. They agreed to divest six stations, which would bring the total down to 259.
DirecTV argues that “without a hold-separate order, Nexstar will fully absorb Tegna and eliminate the firms’ head-to-head competition in the 31 overlapping markets,” Nunley wrote. “Plaintiff asserts it will suffer irreparable harm from a substantially reduced bargaining position vis-à-vis Nexstar in retransmission consent talks. Plaintiff maintains it will soon be negotiating access to highly sought-after content, including Big Four sports and local news, with a merged company that plans to threaten blackouts at rates that could double or even triple the current risk.”
Judge: Nexstar can’t absorb Tegna yet
Nunley concluded that DirecTV’s Clayton Act claim is likely to succeed on the merits and that “the public interest favors a hold-separate order.” The hold-separate directive contains multiple elements intended to stop Nexstar and Tegna from integrating assets or coordinating decisions.
“Nexstar must allow Tegna to continue operating as a separate and distinct, independently managed business unit from Nexstar, and Nexstar must implement measures to preserve Tegna as an ongoing, economically viable, and active competitor,” Nunley wrote. “Tegna shall have separate management that conducts Tegna’s affairs in the ordinary course consistent with pre-closing practices.”
One clause in the order requires Tegna’s leadership to retain control over decision-making “with respect to retransmission consent agreements and negotiations, newsroom personnel, operations and programming, product and service offerings, product development, advertisement sales, and personnel.”
Another provision states that all local TV stations owned by Tegna “will be maintained and operated as independent, ongoing, economically viable, and active competitors in the business of licensing retransmission consent” to TV providers. A clause aimed at preventing layoffs requires the companies “shall use all reasonable efforts to maintain” Tegna stations’ pre-merger staffing levels.
Nexstar has until April 1 to file arguments explaining why a preliminary injunction should not be entered, and a hearing is scheduled for April 7 to consider the potential 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.
