(The Center Square) – Acquisition by Nexstar of Tegna involving television affiliates in the Charlotte, Greensboro and Virginia Tidewater market stretching into eight northeastern North Carolina counties will remain on hold and in litigation in part pursued by North Carolina’s attorney general.
A $6.2 billion acquisition set to take effect Tuesday evening, already approved by the Federal Communications Commission and the U.S. Department of Justice last month, was stopped by a preliminary injunction. Friday’s ruling from Chief District Judge Troy Nunley in the U.S. District Court for the Eastern District of California in Sacramento is being appealed to the 9th U.S. Circuit Court of Appeals in San Francisco by litigators for Nexstar and joint defendant Tegna.
Nunley reasons the merger could reduce competition in dozens of local markets. And, retransmission fees for consumers could rise.
Nexstar would add NBC affiliate WCNC in the Charlotte market to already owning Fox affiliate WJZY; add CBS affiliate WFMY in the Greensboro/High Point/Winston-Salem market to already owning Fox affiliate WGHP; and add ABC affiliate WVEC in the Norfolk/Newport News market of Virginia and northeastern North Carolina to already owning NBC affiliate WAVY and Fox affiliate WVBT.
““This is another big anti-monopoly win, coming right on the heels of our Ticketmaster win,” said first-term Democratic Attorney General Jeff Jackson. “We sued to stop this merger because it would hand one company 228 television stations reaching roughly 80% of American households, more than double the FCC’s 39% national ownership cap. You can’t concentrate that much media power in one company.
“This ruling freezes Nexstar and Tegna as separate companies, with separate management and separate newsrooms, while the court hears our full case.”
Jackson says by owning two stations in the market, “it can threaten to black out two of your four major channels at once if your provider won’t pay the new price. Your cable or satellite company will have no real choice but to pay. That cost goes directly onto your monthly bill.”
The attorney general cites an example in Indianapolis to make the point of reduced newsrooms. There, the Fox and CBS affiliates are owned by Nexstar, and those two stations share anchors, reporters, new directors and website.
“That pattern is central to the deal’s economics,” Jackson says. “Nexstar’s chief financial officer told investors the overlap stations are ‘an area where there’s a significant portion of those synergies.’ The synergies are valued at about $300 million.”
Plaintiffs are DirecTV and the states of California, Colorado, Connecticut, Illinois, New York, Oregon and Virginia in addition to North Carolina. Nexstar Media Group and Tegna are defendants.
