States sue to block Nexstar-Tegna deal, citing consumer cost concerns.
Attorneys general from eight U.S. states have filed a lawsuit to block Nexstar Media Group's proposed $6.2 billion acquisition of Tegna. The suit alleges the deal would grant Nexstar excessive control over local TV stations, reduce news diversity, and lead to higher consumer cable bills due to increased leverage in retransmission fee negotiations. Pay-TV provider DirecTV has filed a separate, similar lawsuit seeking to block the merger on grounds of potential consumer harm.
Key Takeaways
- The lawsuit, led by eight states including California and New York, argues the deal creates excessive local market control.
- A combined Nexstar-Tegna would own 265 TV stations reaching 80% of the U.S., with multiple outlets in several markets.
- Plaintiffs assert increased leverage in retransmission fee negotiations for NFL-carrying stations would raise consumer cable bills.
- DirecTV, serving 11 million subscribers, also filed suit, citing risks of higher costs, reduced competition, and programming blackouts.
Why It Matters
The lawsuits from eight states and DirecTV create a formidable challenge to the $6.2B deal, threatening a key consolidation play for local broadcasters. The suits link station ownership scale directly to higher consumer pay-TV bills via retransmission fees. This highlights the industry's core tension: broadcasters argue for scale to compete with streaming giants, while distributors and states fear the market power from must-have content like the NFL. Broadcasters feel constrained by the 2003 ownership cap limiting them to 39% U.S. reach. Watch if this legal battle forces regulators to re-evaluate that cap.
Read full article at msn.com
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