California and six other states filed to block Nexstar’s merger with Tegna, a deal that would create a broadcasting giant.
The $6.2 billion transaction will give the combined company 265 channels covering 80% of the country.
Attorney General Rob Bonta said in a statement, “This merger will create an unprecedented level of concentration in local TV markets and is expected to raise cable and satellite prices nationwide, causing irreparable harm to local news and consumers who rely on their reporting as an important source of information.”
The lawsuit, filed in federal court in Sacramento, says Nexstar-Tegna will get more leverage to negotiate with cable and satellite operators, allowing them to collect higher retransmission license fees that will be passed on to consumers.
The FCC and the Department of Justice are reviewing the work. But President Donald Trump approved the deal, and FCC Chairman Brendan Carr responded that he agreed with Trump’s order to “make that deal,” Bonta’s office said in a press release. Nexstar-Tegna needs a waiver from the FCC’s national ownership rule that limits any entity from owning stations that cover more than 39% of the country.
Joining California in the lawsuit are the attorneys general of New York, Colorado, Illinois, Oregon, North Carolina, Connecticut, and Virginia.
A Nexstar spokesperson did not immediately respond to a request for comment. The company said it expects the deal to close by mid-summer.
Among other things, the states point to the hope that Nexstar-Tegna will have more than one channel at the top of the market. For example, in the Sacramento–Stockton–Modesto market, Nexstar owns Fox affiliate KTXL-TV, and Tegna owns ABC-owned KXTV-TV. There is overlap in 10 other markets across all states in the case.
In the lawsuit, the states also cited the merger’s impact on local news, saying the combined entity would combine the local newsrooms of previously separately owned stations, and the same on-air news from multiple stations in one location.
“Elimination of independent sources of local news is a deterioration in quality caused by consolidation of market power and, as such, fits well within traditional antitrust concerns about the ability of firms with significant market power to reduce the quality of products (even if they raise prices),” the lawsuit said. “Furthermore, ending the operation of independent news will reduce the diversity of news coverage at a time when, with the challenges in local newspapers, local news coverage is essential to the ability of an informed citizen to participate in the activities of local government and society.”
The lawsuit alleges a violation of Section 7 of the Clayton Act. State AGs are asking for an injunction to block the merger or consolidation of any of the top channels in the 31 markets where Nexstar-Tegna’s ownership extends.
Bonta said in a statement, “This merger is illegal, plain and simple, against federal consumer protection laws. When broadcast media is owned by a few companies, we get fewer voices, less competition and communities lose an important check on the power of local journalism.”
Nexstar has engaged in an aggressive lobbying campaign for the merger, arguing that the combination is necessary to compete with the tech giants that have received most of the local advertising revenue in recent decades. The company, along with the National Association of Broadcasters, is urging the FCC to loosen its copyright rules, seeing them as outdated in a radically changed media environment.
The proposed merger has drawn high-profile opponents, including Chris Ruddy, CEO of Newsmax and a friend of Trump, who testified against it on Capitol Hill. He argued that the deal would give a major channel group the power to extract favorable terms from cable channels, at the expense of outlets like his.
