Nexstar and Tegna’s Local TV Megamerger Challenged by Eight States

Nexstar CEO Perry Sook Jason Koerner/Getty Images Logo text

A coalition of eight states have filed a lawsuit seeking to block Nexstar‘s $6.2 billion takeover of Tegna, a deal that would bring hundreds of TV stations across the United States under one umbrella.

In a lawsuit filed late Wednesday in California federal court, the states led by Democratic prosecutors argue that the merger would give the combined company too much control over local TV in violation of antitrust laws. The tie-up would allow it to raise prices, cut jobs and lead to less diversity in news coverage, they claim.

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“This merger would cause incredibly high levels of concentration in local TV markets and is expected to raise cable and satellite prices across the country, causing irreparable harm to local news and consumers who rely on their reporting as a critical source of information,” said California Attorney General Bonta in a statement. The state was joined by New York, Colorado Illinois, Oregon, North Carolina, Connecticut and Virginia.

Filing a separate lawsuit on Thursday, DirecTV, which retransmits local TV broadcasts, also sued to block the proposed agreement. It says that the deal will lead to an “enormous increase in market power,” enabling Nexstar to raise license fees in a way that will result in higher prices for subscribers.

FCC Chair Brendan Carr has endorsed the transaction, which requires approval from the agency and changes to station ownership rules. Under federal law, a company’s reach is limited to 39 percent of homes. If the merger closes, the combined company would reach roughly 80 percent by owning 265 TV stations across 44 states and Washington, D.C.

The legality of whether the FCC can unilaterally raise the ownership cap remains unclear. Nexstar has asked for a waiver.

The companies have framed that deal as urgent and necessary for its survival. They point to competition from Big Tech companies like Google and Amazon, who are hoovering up the majority of ad dollars. “Steep competition from tech platforms has engendered a crisis even for broadcasters considered to be well-positioned,” Nexstar wrote in an FCC filing.

Also a talking point: the political makeup of news. Nexstar CEO Perry Sook has discussed how the merger would allow it to challenge media coverage dominated by legacy media companies. President Donald Trump has stood by the deal, writing on Truth Social that a more powerful Nexstar would balance out “the Fake News National TV Networks.”

Nexstar is the largest operator of local TV stations in the United States, with Tegna ranking in the top five. In California, the combined company would own half of stations affiliated with the Fox, NBC, ABC and CBS networks. If cable providers refuse to pay increased licensing fees, Nexstar would have the ability to black out channels from those networks.

In the lawsuit, the states argue that the companies are direct competitors and that a merger would cement their control over local TV in several markets.

“Competition among local TV stations allows consumers to enjoy a variety of affordable options for quality coverage of news, sports, and more,” said New York Attorney General Letitia James. “This illegal merger threatens local news and could raise fees for consumers by combining hundreds of TV stations under the same owner.