Federal Judge Halts $6.2 Billion Nexstar-Tegna Merger Citing Antitrust Concerns

SACRAMENTO, Calif. — A federal judge on Friday issued a preliminary injunction that temporarily blocks the $6.2 billion merger of local television giants Nexstar Media Group and Tegna, halting the integration of the two companies while an antitrust lawsuit proceeds. The ruling, issued on April 17 by Chief Judge Troy L. Nunley of the U.S. District Court for the Eastern District of California, represents a significant legal setback for a deal that would create a broadcast behemoth with unparalleled reach in local media markets across the United States. In his decision, Judge Nunley ordered that the two companies must remain separate pending further court proceedings. “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,” the judge wrote. The injunction followed a temporary restraining order that was extended on April 10 to give the court more time to consider the arguments. The legal challenge was brought by a coalition of eight state attorneys general and the satellite television provider DirecTV. In separate but parallel lawsuits, they argued that allowing the nation's largest local broadcaster, Nexstar, to acquire its rival Tegna would violate U.S. antitrust laws. The plaintiffs contend the merger would grant the combined entity excessive market power, leading to higher retransmission fees that would ultimately be passed on to consumers as higher cable and satellite bills, while also harming competition in local journalism. Colorado Attorney General Phil Weiser, one of the officials suing to block the deal, previously voiced concerns about the consolidation of local news sources. “We want a robust dissemination of ideas from different sources,” Weiser told NPR. “And in Colorado right now, when you look at the local news market, it's important that there's rival sources.” The merger, announced last year, had already secured approval from the Federal Communications Commission. That regulatory green light was contingent on the FCC waiving rules that limit how many local television stations a single company can own. Proponents at the time argued the combined company would serve as a necessary counterweight to the power of national television programmers. If completed, the deal would create a company owning 265 television stations across 44 states and the District of Columbia. The vast majority of these stations are local affiliates of the “Big Four” networks—ABC, CBS, Fox, and NBC—and the new entity would reach an estimated four out of every five U.S. households. Nexstar has consistently defended the acquisition, arguing it would lead to an expansion of local news coverage and programming, not a reduction. The company has pointed out that even with the acquisition of Tegna, it would own just 15% of all local TV stations in the country. In public statements, Nexstar has also touted the efficiencies the merger would create, noting plans to consolidate programming teams in major markets such as Atlanta, Denver, Minneapolis, Phoenix, and Seattle. However, the company's strategy in finalizing the deal may have contributed to its current legal predicament. According to some legal experts, Nexstar's decision to move quickly to close the transaction after receiving FCC approval may have been perceived as an attempt to sidestep judicial review. Andrew Jay Schwartzman, a public interest media lawyer, noted that the companies “rushed to close the transaction, apparently hoping this could avoid judicial review.” He suggested this approach may have “inflamed the judge and resulted in a more harsh ruling than might have otherwise been the case.” This judicial intervention serves as a stark reminder that M&A transactions, particularly those of this scale, carry significant regulatory and legal risks that extend beyond initial agency approvals. In our experience, even deals that receive a green light from a body like the FCC can be undone in the courts if antitrust concerns are substantial enough. The Nexstar-Tegna case highlights the critical need for a comprehensive strategy that anticipates challenges not just from regulators, but from state attorneys general and commercial competitors like DirecTV. Rushing to close a deal without fully accounting for the legal landscape can prove to be a costly error, creating operational chaos and jeopardizing the entire transaction. For any business owner contemplating a sale or acquisition, this situation underscores the importance of rigorous due diligence and expert guidance. Navigating the complexities of antitrust law and managing the multifaceted approval process is a core component of our mergers and acquisitions advisory service. A successful transaction requires careful planning and a proactive approach to potential legal hurdles. To ensure your deal is structured to withstand scrutiny, contact C&S Finance Group LLC at csfinancegroup.com to discuss your strategy. With the preliminary injunction now in place, the operational merger of Nexstar and Tegna is frozen indefinitely. The future of the $6.2 billion deal now hinges entirely on the outcome of the full antitrust lawsuit, which will continue to play out in federal court.