States Launch Legal Battle Against $6.2 Billion Nexstar-Tegna Merger

A coalition of eight states, led by California and New York, is challenging a major broadcast media acquisition, citing antitrust concerns and potential harm to local journalism.

California, New York, and six other states have filed a lawsuit seeking to block Nexstar's proposed $6.2 billion takeover of rival television station owner Tegna. The legal action, lodged late Wednesday, argues that the significant tie-up would violate federal antitrust laws, potentially leading to reduced competition and fewer independent voices in local news markets across the nation.

The lawsuit was filed in the U.S. District Court for the Eastern District of California. It specifically alleges that the merger would contravene Section 7 of the Clayton Antitrust Act, a federal statute designed to prevent acquisitions that "substantially lessen competition."

Legal Challenge Targets Media Consolidation

Attorneys General Rob Bonta of California and Letitia James of New York spearheaded the multi-state effort. They were joined by the attorneys general of Colorado, Illinois, Oregon, North Carolina, Connecticut, and Virginia, forming a formidable legal front against the proposed media consolidation.

California Attorney General Rob Bonta articulated the coalition's core concern in a news release. "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," Bonta stated. His office has highlighted potential adverse effects on media markets in Sacramento and San Diego.

Echoing these sentiments, New York Attorney General Letitia James emphasized the impact on consumers and news diversity. "This illegal merger threatens local news and could raise fees for consumers by combining hundreds of TV stations under the same owner," James said in a statement. "I’m suing to stop Nexstar’s illegal merger with Tegna to keep cable bills down and ensure New Yorkers can access the independent local news options they count on." James' office specifically voiced concerns about the effects of such consolidation within the Buffalo media market.

Nexstar currently operates over 200 owned and partner stations across 116 markets, and its assets include The CW broadcast network and the cable news channel NewsNation. Tegna, meanwhile, owns 64 stations spanning 51 markets. The combined entity would create an expansive broadcast footprint across the United States.

Regulatory Hurdles and Divergent Views

Completing the proposed merger faces significant regulatory hurdles, primarily concerning federal ownership caps. Federal rules currently prohibit a single company from reaching more than 39% of U.S. households. The merged Nexstar-Tegna entity would, by contrast, reach nearly 60% of U.S. households, necessitating a change to this national ownership cap by the Federal Communications Commission (FCC).

The FCC has not publicly announced whether it plans to hold a vote on altering the national ownership cap, nor did the agency immediately respond to a request for comment on the matter. Nexstar and Tegna also did not immediately respond to requests for comment regarding the states' lawsuit.

However, opinions within the federal regulatory sphere are divided. FCC Chair Brendan Carr has previously expressed support for the deal, stating in a February 7 post on X, "Let’s get it done." Conversely, Anna M. Gomez, the sole Democratic commissioner on the FCC panel, reacted to the states' suit by advocating for a transparent review process. "The FCC must not rubber-stamp this unlawful merger behind closed doors. This would unleash a new broadcast behemoth that could gut local news and lead to higher prices," Gomez posted on X, adding, "Consumers deserve an open and transparent process, not a backroom deal. The full Commission must weigh in."

Broader Scrutiny on Media Industry Mergers

The lawsuit against the Nexstar-Tegna deal signals a broader trend of increased intervention by state attorneys general in issues at the intersection of antitrust law and the media industry. In recent months, state attorneys general have asserted themselves on several high-profile cases.

For instance, more than two dozen Republican and Democratic state attorneys general collectively filed a motion for a mistrial in a federal antitrust case aimed at breaking up Live Nation and Ticketmaster. Live Nation, Ticketmaster's parent company, ultimately settled with the Justice Department in that instance.

Additionally, California Attorney General Bonta’s office is currently investigating a separate proposed deal: Paramount Skydance’s acquisition of Warner Bros. Discovery. This potential merger could unite two historic Hollywood movie studios and, notably, place CNN under the same corporate umbrella as CBS News, raising further questions about media concentration.

News of California and New York's plans to challenge the Nexstar-Tegna merger was initially reported earlier this month by The Wall Street Journal, setting the stage for the formal legal challenge now underway.

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