“Defendants also do not dispute Plaintiff’s claim that in 16 [market areas] In cases where Nexstar or Tegna have a Big Four duopoly or duopoly, they employ a single news director to oversee a single newsroom and use the same on-air talent for all of their Big Four channels. [market area],” Nunnally wrote.
Pre-merger Nexstar owned 201 full-power TV stations and Tegna owned 64, for a total of 265. They agreed to sell six stations, which would eventually reduce the total to 259.
DirecTV argues that “absent a hold-separate order, Nexstar would fully absorb Tegna and eliminate the companies’ head-to-head competition in 31 overlap markets,” Nunley wrote. “Plaintiff claims that it would be irreparably harmed by significantly diminishing its bargaining power vis-à-vis Nexstar in retransmission consent negotiations. Plaintiff argues that it is soon negotiating with a merging firm for access to high-demand content, including Big Four sports and local newscasts, with the intention of threatening to double or even triple the blackout by doubling their current threat.”
Judge: Nexstar can’t swallow Tegna yet
Nunley decided that DirecTV’s Clayton Act claim was likely to succeed on the merits and that “the public interest favors a hold-separate order.” The hold-separate order has several components intended to prevent Nexstar and Tegna from consolidating assets or making decisions together.
Nunley wrote, “Nexstar must allow Tegna to continue to operate as a separate and distinct, independently managed business entity from Nexstar, and Nexstar must take measures to maintain Tegna as an ongoing, economically viable and active competitor.” “Tegna will have separate management that operates Tegna in the normal manner consistent with pre-closing practices.”
A provision in the order requires that Tegna leadership retain control over decision making “regarding rebroadcast consent agreements and negotiations, newsroom personnel, operations and programming, product and service offerings, product development, advertising 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 provision aimed at preventing layoffs states that the companies must “use all reasonable efforts to maintain” pre-merger staffing levels at Tegna stations.
Nexstar has until April 1 to present arguments why it should not face a preliminary injunction, and a hearing is scheduled for April 7 to discuss a possible preliminary injunction. The judge also ordered Nexstar to submit a report by April 6 detailing the steps taken to comply with the temporary restraining order.
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