“Defendants also do not contest Plaintiff’s assertion that in the 16 [market areas] in which Nexstar or Tegna has a Big Four duopoly or triopoly, they appoint a single news director to oversee a single newsroom and use the same on-air talent for all Big Four channels they own in the [market area],” Nunley wrote.
The pre-merger Nexstar owned 201 full-power TV stations and Tegna owned 64, for a total of 265. They agreed to divest six stations, which would eventually reduce the total to 259.
DirecTV argues that “absent a hold-separate order, Nexstar will fully absorb Tegna and eliminate the companies’ head-to-head competition in the 31 overlap markets,” Nunley wrote. “Plaintiff asserts it will suffer irreparable harm from significantly diminished bargaining power vis-à-vis Nexstar in retransmission consent negotiations. Plaintiff contends it will soon find itself negotiating for access to highly sought after content, including Big Four sports and local news broadcasts, with a merged firm that intends to threaten blackouts doubling or even tripling their present danger.”
Judge: Nexstar can’t swallow up Tegna yet
Nunley decided that DirecTV’s Clayton Act claim is likely to succeed on the merits and that “the public interest favors a hold-separate order.” The hold-separate order has numerous components aimed at preventing Nexstar and Tegna from integrating assets or making decisions together.
“Nexstar must permit Tegna to continue operating as a separate and distinct, independently managed business unit from Nexstar, and Nexstar must put measures in place to maintain Tegna as an ongoing, economically viable, and active competitor,” Nunley wrote. “Tegna shall have separate management that operates Tegna in the ordinary course consistent with pre-closing practices.”
One provision in the order requires that Tegna leadership maintain control over decision-making “with respect to retransmission consent agreements and negotiations, newsroom personnel, operations and programming, product and service offerings, product development, advertisement sales, and personnel.”
Another provision says that all local TV stations owned by Tegna “will be maintained and operated as independent, ongoing, economically viable, and active competitors in the business of licensing retransmission consent” to TV providers. A provision aimed at preventing layoffs says the firms “shall use all reasonable efforts to maintain” Tegna stations’ pre-merger staff levels.
Nexstar has until April 1 to submit an argument for why it should not face a preliminary injunction, and a hearing is scheduled for April 7 to discuss the potential preliminary injunction. The judge also ordered Nexstar to submit a report by April 6 detailing steps it has taken to comply with the temporary restraining order.