California and six other states filed suit to block Nexstar‘s merger with Tegna, a transaction that will create a broadcast station giant.
The $6.2 billion transaction would give the combined company 265 stations covering 80% of the country.
Attorney General Rob Bonta said in a statement, “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.”
The lawsuit claims that Nexstar-Tegna would gain additional bargaining leverage over cable and satellite operators, allowing them to collect higher retransmission consent fees that will be passed on to consumers.
The FCC and the Justice Department are reviewing the transaction. But President Donald Trump has endorsed the deal, and FCC Chairman Brendan Carr responded that he agreed with Trump’s order to “get that deal done,” Bonta’s office noted in a press release. Nexstar-Tegna needs a waiver from an FCC national ownership rule that limits any entity from owning stations that cover more than 39% of the country.
Joining California in the lawsuit are 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.
Among other things, the states point to the prospect of Nexstar-Tegna owning more than one top four station in a market. As an example, in the Sacramento–Stockton–Modesto market, Nexstar owns the local Fox affiliate KTXL-TV, and Tegna owns the local ABC affiliate KXTV-TV. There is overlap in 10 other markets across the states in the lawsuit.
In the lawsuit, the states also cited the impact of the merger on local news, claiming that the merged entity would be combine local newsrooms of previously separately owned stations, and air identical reports across multiple stations in one location.
“Eliminating independent sources of local news is a quality degradation resulting from the aggregation of market power and, as such, fits neatly within traditional antitrust concerns over the ability of firms with significant market power to lower the quality of products (even as they boost prices),” the lawsuit stated. “Moreover, eliminating independent news operations will diminish diversity in news coverage at a time when, with challenges to local newspapers, local broadcast news coverage is critical to the ability of an informed citizenry to participate in local governmental and community activities.”
The lawsuit alleges violation of Section 7 of the Clayton Act.
Bonta said in a statement, “This merger is illegal, plain and simple, running contrary to federal antitrust laws that protect consumers. When broadcast media is owned by a handful of companies, we get fewer voices, less competition and communities lose the critical check on power that local journalism delivers.”