DIRECTV Files Federal Antitrust Lawsuit to Block Anticompetitive Nexstar–TEGNA Merger

DIRECTV today filed a federal antitrust lawsuit in the U.S. District Court for the Eastern District of California, Sacramento Division, alleging that the proposed merger between broadcast giants Nexstar Media Group and TEGNA violates the federal antitrust laws and would significantly harm consumers.

The complaint asserts that the proposed merger—which combines the nation’s largest and second-largest English-language broadcast station groups—represents a concentration of broadcast media without precedent, and will irreparably drive up consumer costs, reduce local competition, shutter local newsrooms, and increase both the frequency and duration of blackouts of key local teams and network programming. DIRECTV’s lawsuit can be read here. 

DIRECTV’s action follows a multistate lawsuit filed in the same court by attorneys general from California, Colorado, Connecticut, Illinois, New York, North Carolina, Oregon, and Virginia.

“DIRECTV supports the action taken by the states and has determined it is necessary to join this effort to protect competition and consumers,” said Michael Hartman, general counsel and chief external affairs officer at DIRECTV. “We have consistently made clear that this merger is anti-competitive and not in the public interest and, if it goes forward, will trigger a wave of similar consolidation.”

Nexstar currently owns 164 full-power local broadcast stations across 114 Nielsen media markets, reaching approximately 70% of U.S. television households. Its acquisition of TEGNA’s 64 stations would expand that reach to more than 80% of households nationally—roughly double the current federal ownership cap of 39%.  It also give Nexstar ownership of two or more affiliates of ABC, CBS, FOX and NBC in more than 30 markets covering more than 25 million TV homes.

These markets include major metropolitan areas such as Austin; Buffalo, N.Y.; Charlotte, N.C.; Cleveland and Columbus, Ohio; Denver; Indianapolis; Memphis, Tenn.; New Orleans; Portland; San Diego; St. Louis; and Tampa, among others (see below). Many are home to major professional or collegiate sports teams, increasing Nexstar’s leverage to impose blackouts during carriage disputes and raise rates.  A significant number are also state capitals, where reduced competition would limit the diversity of local news coverage.

The complaint also highlights that the merger is likely to exacerbate the already sharp rise in retransmission consent fees charged by local station groups, which have increased more than 5,000% over the past two decades—from approximately $214.6 million in 2006 to an estimated $11.9 billion in 2025.  Retransmission consent fees are a large input cost for pay TV providers, which means the greater leverage and market power Nexstar will gain by buying its close rival TEGNA will translate into price increases that end up on millions of Americans’ monthly TV bills.

“The acquisition would give Nexstar control of 228 broadcast stations reaching 80% of television households in 132 local markets and increase concentration in dozens of local markets by more than 10 times the amount that is presumptively unlawful under the antitrust laws,” the complaint states.  “That enormous increase in market power will enable Nexstar to raise prices and reduce the amount, variety, and quality of local news without having to worry about losing business to competition.”

“By acquiring TEGNA’s competing stations, Nexstar will deprive distributors and consumers of the benefits of competition:  lower prices and higher quality,” the complaint further states.  “Instead, Nexstar will be able to raise prices and reduce quality. DIRECTV and its subscribers will end up paying more for less. The antitrust laws forbid acquisitions that substantially lessen competition, enabling acquirers to charge more while offering less.”

Here are the key cities and stations where Nexstar’s planned acquisition of TEGNA would give it control of more than one Big Four network affiliate.  State capitals are bolded. 

Watch the press conference:

About DIRECTV

DIRECTV is a premier provider of digital television entertainment in the United States. With a diverse range of programming options and cutting-edge technology, DIRECTV delivers a world-class viewing experience to millions of subscribers. Its commitment to innovation and customer satisfaction keeps it at the forefront of the entertainment industry while providing customers with greater choice, flexibility, and control. For more information, visit http://www.directv.com.

For more information, contact:          

Tom Tyrer

DIRECTV Communications

Phone: 310.874.0441

Email: thomas.tyrer1@directv.com