Eight state attorneys general file suit to block TV station group merger

A group of attorneys general are taking legal action to block Nexstar Media Group’s proposed $6.2-billion acquisition of Tegna’s TV stations, calling the deal bad for consumer cable bills and local journalism.

A lawsuit filed Wednesday in U.S. District Court in Sacramento says the proposed deal by eight state law enforcers, including California Atty. Gen. Rob Bonta, claims the proposed deal will give Nexstar too much control of local TV stations, ultimately hurting consumers by diminishing the diversity of news sources in their markets.

Bonta said in a statement that the deal will cause “irreparable harm to local news and consumers who rely on their reporting as a critical source of information.” The plaintiffs also include state attorneys general in Colorado, Connecticut, Illinois, New York, North Carolina, Oregon and Virginia.

The Irving, Texas-based Nexstar is currently the largest station owner in the U.S., with 164 outlets including KTLA in Los Angeles. If the merger with Tegna succeeds, Nexstar would have 265 TV stations reaching 80% of the U.S. and multiple outlets in a number of markets.

The suit also claims that the merger would give Nexstar too much leverage in negotiating fees from pay-TV providers that carry their stations. Higher fees paid to Nexstar would be passed along to consumers in their cable and satellite bills, the lawsuit asserts.

Most of Nexstar’s stations are affiliates of ABC, CBS, NBC and Fox, all of which carry NFL football, the highest-rated programming on TV by a wide margin. Disputes over carriage fees between station owners and pay-TV providers often result in blackouts and service interruptions to consumers.

DirecTV, which serves around 11 million pay-TV subscribers in the U.S., filed a similar lawsuit in the same court on Thursday, claiming the Nexstar deal will “irreparably drive up consumer costs, reduce local competition, shutter local newsrooms, and increase both the frequency and duration of blackouts of key local teams and network programming.”

A Nexstar representative did not respond to a request to comment.

President Trump has said he favors Nexstar’s proposed deal. But every major TV station owner believes consolidation in the TV station business is necessary to thrive going forward as they battle to compete with streaming video platforms that have eaten away at their audience share.

The companies say they are at a disadvantage in competing with tech companies by being limited to owning stations in 39% of the U.S., a cap that was set in 2003.

Nexstar recently cut veteran anchors and on-air reporters from its stations in Los Angeles, Chicago and New York. Further reductions in local TV newsrooms would occur if Nexstar succeeds in acquiring Tegna, which would likely mean consolidation of local newsrooms in which it owns more than one station.