States Challenge Nexstar's $3.5 Billion Acquisition of Tegna

Nexstar Media Group Inc. Deal Faces Lawsuit from State Attorneys General

Key Figures:

• $3.5 billion: Value of Nexstar Media Group Inc.'s proposed deal for Tegna Inc.
• 265: Number of full-power TV stations the combined companies would own
• 80%: Percentage of US households that the combined companies would reach
• 39%: Maximum percentage of the country that a local station owner is allowed to serve under federal law

A group of state attorneys general has filed a lawsuit in federal court in Sacramento, California, to block the proposed $3.5 billion deal between Nexstar Media Group Inc. and Tegna Inc. The lawsuit argues that the deal would give the combined company too much control over television in dozens of markets around the US, impacting the delivery of local news, raising cable prices, and leading to job cuts.

Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data

The lawsuit was filed by a group of Democratic law enforcers from states including California, New York, and Colorado. DirecTV has also filed its own lawsuit challenging the deal, citing concerns that it will lead to prolonged programming blackouts as the newly enlarged company fights with distributors over fees.

The combined companies would own 265 full-power TV stations, reaching 80% of US households, which exceeds the 39% maximum percentage of the country that a local station owner is allowed to serve under federal law. Both Nexstar and Tegna operate stations affiliated with ABC, CBS, NBC, and Fox. Nexstar also owns the CW network and NewsNation.

The deal requires approval from the Federal Communications Commission (FCC) and the Justice Department. The FCC would either have to grant the companies a waiver from the media ownership cap or lift the cap altogether.