A coalition of 13 attorneys general joined with DirecTV on Wednesday in accusing Nexstar of violating an injunction by appointing the members of Tegna‘s board.
The two TV station groups were ordered in April to halt their integration and to maintain independent operations pending the outcome of an antitrust trial. But Nexstar has since appointed its own current and former executives to serve on Tegna’s board, which the plaintiffs allege is not allowed under the order.
“Nexstar cannot simultaneously control TEGNA’s Board and comply with an injunction requiring TEGNA to remain independent,” the plaintiffs wrote. “This should have been obvious.”
The plaintiffs asked Judge Troy Nunley, who issued the order, to clarify that it does not permit Nexstar to oversee Tegna’s operations in this way.
In response, Nexstar said it has “scrupulously complied with the Court’s hold-separate order.”
“TEGNA continues to operate independently, and Nexstar has no involvement in TEGNA’s retransmission consent negotiations, content decisions, staffing, or other day-to-day operations,” the company said. “Nexstar’s executives’ service on TEGNA’s Board is consistent with the Court’s order and is critical to ensuring that Nexstar can continue to satisfy its financial reporting obligations while the hold-separate requirements are in place.”
Nexstar has appealed the injunction to the 9th Circuit, and is awaiting a ruling.
In their motion, the plaintiffs point to comments that Nexstar CEO Perry Sook made in May, in which he said that Tegna would operate as a subsidiary of Nexstar, and that the managers would report to the board.
Those comments led the plaintiffs to seek further information about how the companies are being run. The motion alleges that Nexstar has refused to turn over certain information or respond to questions, and has likewise refused to remove its executives from the Tegna board.
“The stakes here are high: Further integration is against the court’s directive and, if allowed, would kick off Nexstar and Tegna’s ability to control and raise prices, fire journalists, and dominate the broadcast media landscape,” said California Attorney General Rob Bonta, in a statement.
The motion also asks the judge to order expedited discovery and monthly updates to the court about how Tegna is being run.
The states allege that the merger will give Nexstar undue leverage in retransmission negotiations with cable and satellite distributors, leading to higher consumer prices. The suit also alleges that the merger will lead to fewer independent local news outlets, “at a time when, with challenges to local newspapers, local broadcast news coverage is critical to the ability of an informed citizenry to participate in local
governmental and community activities.”
Source: variety.com
