A federal district court has temporarily blocked the merger between Nexstar and Tegna, finding that the plaintiff, DirecTV, is likely to succeed on the merits of its antitrust claims.
In a major blow to Nexstar, Chief Judge Troy Nunley for the Eastern District of California issued a detailed order granting a temporary restraining order.
Nunley found that the transaction likely violates Section 7 of the Clayton Act by substantially lessening competition in local television markets and increasing retransmission fees for distributors and consumers.
DirecTV, the nation’s largest satellite video programming distributor, brought the suit this month seeking to halt Nexstar’s $6.2 billion acquisition of Tegna.
The merger would make the liberal-leaning Nexstar a giant conglomerate owning 260 stations across 44 states.
The combined company would own more stations than those owned by NBC, ABC, Fox, and CBS combined.
"The federal court took the unusual step of stopping this merger because Brendan Carr rubber-stamped the most massive TV consolidation in history using a kangaroo process," Newsmax CEO Christopher Ruddy said, commenting on the ruling.
The DirecTV case is one of multiple legal actions underway after the FCC, under Chair Brendan Carr, approved the Nexstar merger over a week ago.
At the time of the approval, eight state attorneys general led by California also filed suit in federal court to block the merger.
Soon after, Newsmax, along with six state cable associations, filed suit in the District Court for the District of Columbia, seeking a stay of the FCC’s merger approval.
Newsmax argued that the FCC merger approval will give Nexstar reach to 80% of U.S. homes through its new combined network — far more than the 39% allowed under U.S. federal law.
Last Thursday, a three-judge federal panel heard arguments from Newsmax and Nexstar on the stay request.
In its case in California, DirecTV argued that the merger would dramatically increase Nexstar’s bargaining power, allowing it to extract higher fees on cable and satellite operators and impose more frequent blackouts.
The court summarized the core allegation: The merger would "drive up the cost of television service to tens of millions of Americans" and "substantially reduce competition in dozens of local markets."
DirecTV’s claims centered on two primary harms.
First, it argued that the merger would increase retransmission consent fees — payments distributors must make to broadcast station owners.
These fees have already surged, rising "more than 2,000 percent" since 2010, and the merger would further accelerate that trend.
Second, DirecTV contended that consolidation would reduce the quality and diversity of local news by enabling Nexstar to combine operations in overlapping markets, effectively eliminating competition between stations.
In 23 markets Nexstar would own two or more major station affiliates — including ABC, NBC, CBS, and Fox — giving it market dominance in the broadcast sector.
The plaintiff also emphasized Nexstar’s own internal strategy, alleging that the company seeks acquisitions to gain "scale" and "leverage" over distributors.
This leverage, DirecTV argued, allows Nexstar to credibly threaten blackouts — cutting off access to popular programming such as live sports and local news — to force higher fees.
Applying the standard for injunctive relief, the court focused heavily on whether DirecTV was likely to succeed on the merits.
It found that the relevant product market — retransmission consent licenses for "Big Four" broadcast stations — was properly defined.
The court agreed that these stations offer "unique offerings such as local news, sports, and highly-ranked primetime programs," making them indispensable to distributors.
On competitive effects, the court concluded that the merger would significantly increase market concentration.
In many markets, the combined firm would exceed 30% market share — triggering a presumption of illegality under Supreme Court precedent — and in some cases surpass 50%.
Beyond structural metrics, the court credited DirecTV’s evidence of likely anticompetitive effects.
It emphasized that the merger would enhance Nexstar’s bargaining leverage, observing that courts routinely find antitrust violations where consolidation increases negotiating power over buyers.
The opinion noted that Nexstar itself has acknowledged acquisitions as a means to gain leverage and raise prices.
The court also accepted evidence that consolidation would harm local journalism.
It cited internal statements that overlapping stations could be operated with "one infrastructure," supporting DirecTV’s claim that the merger would lead to newsroom consolidation, mass layoffs of TV journalists, and reduced content diversity.
The court held that DirecTV would suffer irreparable harm absent relief, emphasizing that "a lessening of competition constitutes an irreparable injury."
On the public interest, the court stressed that antitrust law prioritizes preserving competition.
It rejected the defendants’ reliance on prior approval by regulators, explaining that agency clearance does not preclude judicial enforcement of antitrust laws.
The FCC’s action in approving the merger was unprecedented and rushed — which included no standard Department of Justice review of the new company’s impact on local markets.
Judge Nunley concluded that the plaintiff had demonstrated a "reasonable probability of anticompetitive effect" and therefore a likelihood of success on the merits.
The Nexstar merger now faces serious hurdles that put the transaction in doubt.
Last week, Senate Commerce Chair Ted Cruz rebuked the FCC for approving the merger with a waiver granted at the Media Bureau, an administrative level entity.
"I believe it should have been a full commission vote," Cruz said.
In a Senate hearing last month Cruz made clear the commission itself could not change the 39% TV ownership cap since it was set in statue.
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