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SACRAMENTO, Calif. (AP) — A federal judge has blocked a $6.2 billion merger of local television giants Nexstar Media Group and rival Tegna until an antitrust lawsuit is resolved.
U.S. District Court Chief Judge Troy L. Nunley made the ruling late Friday afternoon, finding that eight attorneys general and DirecTV were likely to prevail in their legal bid to stop the merger.
Nexstar now looks exposed to shareholder suits after a poor, high risk closing strategy.
ReplyDeleteIf this does end up in full litigation (I think unlikely), Nexstar should not be excited about discovery—because that’s where intent and process usually get torn open. Just look at Live Nation/Ticketmaster: internal emails became the story.
I bet they settle for a court ordered remedy and spin off more stations. Put another way - this is a mess!
The lawyers are salivating with billable hours coming fast, that's for sure! Your bet could work.
DeleteI'm relieved that this merger has been paused for now. I look forward to the resolution of the antitrust lawsuit. It does not look good for Nexstar.
ReplyDeleteNope and I think the lesson from this is is that just because the FCC says its okay, don't expect every judge, especially ones based in blue states like CA, to feel the same way. TBH Wayne, I am honestly surprised WA AG Nick Brown didn't enter this legal fray himself with KING/KONG of course being impacted by it
DeleteThe primary reason is likely that Nexstar wasn’t competing head-to-head with Tegna in any Washington state TV markets—these stations are essentially just changing hands, with no bona fide antitrust concerns.
DeleteThe only market serving Washington State that has Nexstar and Tegna competing head to head is Portland, which covers some counties in Southwest Washington. AG Brown could have potentially sued under that basis, but it wouldn't have been as strong of a case as the other states that did sue had as they have many more viewers and stations being impacted.
DeleteFrom what I recall, when Sinclair was set to buy Tribune Media (Q13) in 2018, the deal fell through. That’s when Nexstar stepped in and bought those Tribune stations, which is exactly how they became the largest station owner in the U.S.
ReplyDeleteNow, with the Nexstar/Tegna deal on hold, it’s clear someone will eventually buy them. It’s not like Nexstar is "stealing" Tegna … Tegna has been looking for a buyer for years. If Nexstar can’t close the deal, who is left? Sinclair? They actually tried to outbid Nexstar with a $6.2 billion offer recently, but Tegna turned them down and went with Nexstar instead. But if the Nexstar deal officially dies, Tegna might have no choice but to go back to Sinclair. Just a thought.
So much on the table right now. The Nexstar appeal process could drag on for who knows how long, leaving Tegna at the altar. There are new rumors I've heard about Sinclair going after Cox/Apollo which would mean a Seattle spin-off of KIRO. We are heading for The Long, Hot Summer
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