A coalition of eight states filed an antitrust lawsuit Wednesday to block Nexstar Media Group’s planned $6.2 billion takeover of Tegna. The suit was filed in federal court in Sacramento.
Nexstar Media Group, Inc., NXST
The states — including California, Colorado, and New York — argue the deal would create too much concentration in local TV markets. California Attorney General Rob Bonta said fewer owners means fewer voices in local journalism.
Nexstar is already the largest local TV station operator in the U.S. Tegna ranks in the top five, owning or operating 64 stations.
Federal law caps any single company’s reach at 39% of U.S. TV homes. A combined Nexstar-Tegna would hit 60%, which would require a rule change to proceed.
FCC Chair Brendan Carr has said he supports the deal and will push for approval. President Trump has also publicly backed the merger, writing on Truth Social that a bigger Nexstar would counter what he called “the Fake News National TV Networks.”
The states allege the merger would push up cable and satellite TV prices for consumers. They also argue it would reduce the quality of local news coverage.
New York AG Letitia James said she is seeking an injunction that would cover all 44 states where the two companies hold stations. She said she expects other states to join the case regardless of political affiliation.
California’s Bonta noted that Nexstar has not offered to sell off any stations to ease competition concerns.
DirecTV, which has more than 8 million pay-TV subscribers, also filed a separate suit in federal court in Sacramento. The satellite provider claims Nexstar would use its expanded scale to raise the rates it charges distributors to carry its stations.
“Nexstar will black out stations or threaten to do so as means of coercing the multichannel video programming distributor to agree to its pricing demands,” DirecTV said in its filing.
Nexstar and Tegna did not immediately respond to requests for comment.
The Justice Department’s antitrust division is also reviewing the deal. A DOJ spokeswoman did not respond to a request for comment on where that review stands.
Despite the legal pressure, Nexstar is moving ahead with deal financing. The company is planning to tap the investment-grade bond market as soon as next week, according to people familiar with the matter.
Bank of America has indicated to investors that Nexstar will receive a second investment-grade rating from Fitch, which would allow the high-grade bond offering to go forward. Nexstar is also weighing high-yield unsecured notes as part of the broader financing package.
The debt package is set to refinance $5.73 billion underwritten by Bank of America, JPMorgan Chase, and Goldman Sachs. A deadline for a $2.75 billion leveraged loan offering tied to the deal had been set for Wednesday.
Nexstar has noninvestment-grade issuer ratings from both S&P and Moody’s, but its secured debt carries a BBB- rating from S&P — the lowest rung of investment grade. The company needs a second high-grade rating on secured debt to proceed with the investment-grade bond plan.
Nexstar agreed last August to buy Tegna in the $6.2 billion deal. NXST stock fell 4.73% on the day the lawsuit news broke.
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